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The best taxable bond mutual funds

Updated on July 30, 2015

Bond funds may not be exciting but it pays to be in the best bond funds

When most people think of bond funds they think of safety and low yields. That is not always the case. In 2008 some bond funds lost over half of their value. In 2009 some bond funds cam close to doubling in value. Still others inched up every year. It is the bond funds that inch up I wish to cover in this hub.

The bond funds highlighted in this article are the types that lose very little money in the very worst bond markets and do reasonably well in good years.

An example of a really outstanding bond fund but will not be included in the list of best bond funds here is the Vanguard GNMA fund. The underling securities in this fund are backed by the US government. When interest rates are stable or falling this is a wonderful fund to own. In times of rising rates this is not a good fund to invest in as the net asset value of the fund will fall. Since most investors are not going to be watching interest rates closely this hub will not be consider this type of bond fund.

Better than a CD with a little more risk.

What are the best bond funds?

The first pick is the Janus Flexible Bond Fund symbol JAFIX. This is a very well run bond fund. The nice feature of this fund is the manager, Darrell Watters, is not restricted in what type of bonds he must invest in. As an example if he feels interest rates are going to fall he may invest in GNMA bonds. What you  have in effect is a professional manager looking to invest in the bonds which will yield the nicest return for the given economic conditions. This fund has made money every year since 1994 when it lost just under 3 percent. This fund is up 8.55 percent per year over the last three years and is up 6.40 percent over the last 10 years. If you are looking for a better return than a CD and are willing to accept a little more risk this fund may be for you.

The next fund is the PIMCO Total Return bond fund symbol PTTDX. This fund is much like the Janus fund above but operates a little more aggressively. This fund just barely lost money in 1999 (down 0.66 percent) and has made money every year since. In the last 3 years this fund is up 9.29 percent per year. Over the last 10 years it is up 7.29 percent per year.

Another fund which performs in the same arena as the previous two funds is the TCW Total Return Bond Fund symbol TGMNX. This fund is much like the two previously mentioned funds. This fund does not invest in lower grade securities as the two funds above do on a limited basis from time to time. This fund is up 8.62 percent over the last three years and up 7.38 over the last 10 years.

If you are currently investing in CD’s and you are very unhappy with the returns you may want to consider one of the listed bond funds.

I hope you invest. When you do invest please invest in the best mutual funds. Diversify your portfolio. Develop an asset allocation which suits your needs and objectives. Invest in the best small cap, best mid cap, large cap, global and even concentrated portfolio funds for your portfolio.

You work hard for your money make the most of it!


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    • joaniemb profile image

      joaniemb 7 years ago from New York

      very well written. Thanks for sharing.

    • mulberry1 profile image

      mulberry1 7 years ago

      I like having some bond funds in my portfolio. Thanks for the recommendations. Hubby prefers Bonds over funds, but he's better about spending a lot of time researching such things.

    • Daddy Paul profile image

      Daddy Paul 7 years ago from Michigan

      Hope to prosper thank you for stopping by Hubpages. I think you are not alone in your concern for bonds at this time.

    • profile image

      Hope to Prosper 7 years ago

      Thanks for the well-written article.

      I really worry about bonds in general. With interest rates at close to zero and soon to rise, I worry their value will plummet. I also worry about the true rate of inflation, as opposed to the published rate. In the last couple of years, I feel the CPI and Core Rate are becoming less and less accurate. And, this exposes investors to errosion of their assets thta can't be easily calculated.

    • Sandyspider profile image

      Sandy Mertens 7 years ago from Wisconsin, USA

      Thanks for the information.