3 Short-Term Government Bond Mutual Funds to Lower Risk

A short-term government bond fund is a mutual fund that is limited by its investment objectives and fund bylaws to invest primarily in short-term obligations of the federal government or its agencies. Depending on the fund’s definition, the short term can be up to five years.Mutual funds that invest in government debt securities are among the most secure investment options that provide regular income while protecting the capital invested. Funds that are part of this category bring a great deal of stability to a portfolio with a large proportion of equity. They pay out dividends more frequently than individual bonds. Hence, these are considered the safest in the bond fund category and are ideal for risk-averse investors.Below, we share with you three top-ranked short-term government bond mutual funds — SEI Short-Duration Government TCSGX, Federated Hermes Short-Term Govt IS FSGVX and GMO US Treasury GUSTX. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. Investors can click here to see the complete list of funds.Sei Short-Duration Government primarily invests its net assets in U.S. Treasury obligations, along with mortgage-backed securities and repurchase agreements guaranteed by U.S. government agencies or instrumentalities. TCSGX advisors may also allocate to securities issued by different U.S. government entities.The fund has returned 4% over the past three years.As of April 2025, TCSGX had 24.6% of its net assets invested in Total Misc. Bonds.Federated Hermes Short-Term Govt IS mainly invests in a portfolio composed of U.S. Treasury securities and U.S. government agency securities with maturities ranging from one to three years, along with related derivative contracts. The fund has returned 3.6% over the past three years.J. Andrew Kirschler has been one of the fund managers of FSGVX since July 2013.GMO US Treasury allocates the majority of its net assets to Direct U.S. Treasury Obligations and collateralized repurchase agreements backed by U.S. Treasury bills, bonds, notes and other Treasury-issued securities, as well as to Separately Traded Registered Interest and Principal Securities and other zero-coupon instruments. The fund has returned 4.9% over the past three years.GUSTX has an expense ratio of 0.1%.To view the Zacks Rank and the past performance of all short-term government bond mutual funds, investors can click here to see the complete list of short-term government bond mutual funds.Want key mutual fund info delivered straight to your inbox?Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >>Radical New Technology Could Hand Investors Huge GainsQuantum Computing is the next technological revolution, and it could be even more advanced than AI.While some believed the technology was years away, it is already present and moving fast. Large hyperscalers, such as Microsoft, Google, Amazon, Oracle, and even Meta and Tesla, are scrambling to integrate quantum computing into their infrastructure.Senior Stock Strategist Kevin Cook reveals 7 carefully selected stocks poised to dominate the quantum computing landscape in his report, Beyond AI: The Quantum Leap in Computing Power.Kevin was among the early experts who recognized NVIDIA's enormous potential back in 2016. Now, he has keyed in on what could be "the next big thing" in quantum computing supremacy. Today, you have a rare chance to position your portfolio at the forefront of this opportunity.See Top Quantum Stocks Now >>View All Zacks #1 Ranked Mutual FundsWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Get Your Free (GUSTX): Fund Analysis Report Get Your Free (TCSGX): Fund Analysis Report Get Your Free (FSGVX): Fund Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks