3 Top-Ranked Diversified Bond Mutual Funds for Risk-Free Returns
Mutual funds having significant exposure to diversified bonds are excellent choices for investors seeking steady returns with a relatively low level of risk. Investing in funds that maintain a portfolio of bonds issued across a wide range of market sectors also reduces sector-specific risk.
Moreover, investing in diversified bond funds is preferred to individual bond investing, as building a portfolio of the second type may prove relatively more expensive. A higher level of liquidity also makes diversified bond funds more attractive.
Below, we share with you three top-ranked diversified bond mutual funds, Goldman Sachs Dynamic Bond Fund GSZAX, Pimco Income Fund PONAX and BBH Limited Duration Fund BBBMX. 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.
Goldman Sachs Dynamic Bond Fund invests most of its assets, along with borrowings, if any, in a diversified portfolio of domestic and foreign investment-grade and non-investment-grade fixed-income bonds. GSZAX advisors also invest in other fixed-income investments.
Goldman Sachs Dynamic Bond Fund has three-year annualized returns of 8.8%. As of the end of September 2025, GSZAX had 46.9% of its assets invested in Miscellaneous Bonds.
Pimco Income Fund invests most of its net assets in a diversified portfolio of Fixed Income Instruments of varying maturities, like forwards or derivatives instruments such as options, futures contracts or swap agreements. PONAX advisors may also invest in high-yield securities rated below investment grade by Moody’s, S&P or Fitch, or unrated, which, according to the fund’s portfolio managers, are of comparable quality.
Pimco Income Fund has three-year annualized returns of 8%.PONAX has an expense ratio of 0.90%.
BBH Limited Duration Fund invests most of its net assets in a diversified portfolio of fixed-income securities, which includes floating or variable-rate debt instruments. BBBMX advisors generally invest in issues that are performing well and available at an attractive valuation.
BBH Limited Duration Fundhas three-year annualized returns of 6.6%. Paul Kunz has been the fund manager of BBBMX since the end of February 2023.
To view the Zacks Rank and the past performance of all diversified bond mutual funds, investors can click here to see the complete list of diversified 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 >>
Beyond Nvidia: AI’s Second Wave Is Here
The AI revolution has already minted millionaires. But the stocks everyone knows about aren’t likely to keep delivering the biggest profits. Little-known AI firms tackling the world’s biggest problems may be more lucrative in the coming months and years.
See
View All Zacks #1 Ranked Mutual Funds
Get Your Free (PONAX): Fund Analysis Report
Get Your Free (GSZAX): Fund Analysis Report
Get Your Free (BBBMX): Fund Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Discover more from stock updates now
Subscribe to get the latest posts sent to your email.
