Steady and Secure: 3 Short-Term Bond Funds Worth Buying

Mutual funds investing in 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 portfolios with a large proportion of equity while providing dividends more frequently than individual bonds. U.S. government bond funds usually invest in Treasury bills, notes and securities issued by government agencies. They are considered the safest in the bond fund category and are ideal for risk-averse investors.A short-term government bond fund is a mutual fund that is limited by its investment objectives and fund bylaws to investing primarily in short-term obligations of the federal government or its agencies. This makes it an ideal option for investors looking for the safety net of investing in government bonds. Depending on the fund's definition, the short term can be up to five years.Below, we share with you three top-ranked short-term government bond mutual funds, namely Vanguard Short Term Treasury Fund VFIRX, Sei Short-Duration Government TCSGX and Loomis Sayles Limited Term Govt and Agency NEFLX. 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.Vanguard Short Term Treasury Fund invests most of its assets in U.S. Treasury securities, which include bills, bonds and notes issued by the U.S. Treasury. VFIRX usually maintains a dollar-weighted average maturity of 1 to 4 years.Vanguard Short Term Treasury Fund has three-year annualized returns of 2.6%. As of January 2025, VFIRX invested 9.9% of its net assets in Total Misc. Bonds.Sei Short-Duration Government invests most of its net assets in U.S. Treasury obligations and other issues such as mortgage-backed securities and repurchase agreements that are guaranteed by various agencies or instrumentalities of the U.S. government. TCSGX advisors may also invest in securities issued by various entities of the U.S. government.Sei Short-Duration Government has three-year annualized returns of 3.1%. TCSGX has an expense ratio of 0.48%.Loomis Sayles Limited Term Govt and Agency invests most of its net assets in issues with credit quality above or below the credit rating of the U.S. government's long-term debt instruments, guaranteed by the U.S. government, its agencies or instrumentalities. NEFLX advisors may also choose investment-grade corporate notes and bonds, collateralized loan obligations, zero-coupon bonds, asset-backed securities and mortgage-related securities.Loomis Sayles Limited Term Govt and Agency has three-year annualized returns of 3.2%. Christopher T. Harms has been the fund manager of NEFLX since April 2012.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 >>Research Chief Names "Single Best Pick to Double"From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpView 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 (TCSGX): Fund Analysis Report Get Your Free (VFIRX): Fund Analysis Report Get Your Free (NEFLX): 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