Delaware Corporate Bond A (DGCAX) Fund

There are various taxable bond mutual funds such as corporate bond funds, U.S. Government bond funds, convertible bond funds, and hybrid taxable bond funds. One of the top corporate bond funds is Delaware Corporate Bond fund. Details are described below.

Delaware Corporate Bond A (Ticker: DGCAX)

The investment objective of this Delaware Corporate Bond fund is to provide total return. This fixed income fund generally invests >80% of assets in investment grade credit ratings corporate bonds. The average portfolio duration of the fund is comparable to the current average duration of the Barclays Capital U.S. Corporate Investment Grade Index. The fund may also invest <20% of its net assets in high yield corporate bonds and <35% of total assets in foreign bonds.

DGCAX Fund Profile

Delaware Corporate Bond fund

• Fund Inception Date: 09/15/1998
• Ticker Symbol: DGCAX (Class A)
• CUSIP: 245908785
• Beta (3yr): 1.00
• Rank in category (YTD): 20%
• Category: Intermediate-Term Bond
• Yield: 4.89%
• Net Assets: $ 952 million
• Sales Load: 4.50%
• Expense Ratio: 0.95%
• Capital Gains:  N/A
• Number of Years Up: 11 years
• Number of Years Down: 2 years
• Average Maturity: 6.77 years
• Average Duration: 11.95 years

Updated 2/5/2012

Thomas H. Chow is the lead manager of this fund since May 2007.  The other portfolio managers are Roger A. Early and Kevin P. Loome. This best bond fund was introduced to investors on September 1988. The yield is 4.89% per year. As part of load fund, this fund has 0.30% 12b1 fee and 4.50% front-end sales-load fee. The annual expense ratio is 0.95%. The fund’s total net assets are $952 million.

The minimum initial investment of this fund is 1,000 for brokerage account and $250 for tax deferred IRA account. Both accounts require $25 minimum subsequent investment. Based on load adjusted return, the performance of this fund is as below:

• 1-year: 2.47%
• 3-year: 13.76%
• 5-year: 6.81%
• 10-year: 7.29% 

This DGCAX fund is rated 4 stars rating by Morningstar. The best 1-year total return was achieved in 2009 with 28.89%. The worst fund’s performance was experienced in 2008 with -8.41%.

This intermediate term bond mutual fund can be bought from 95 brokerages, such as TD Ameritrade, E Trade Financial, Northwestern Mutual Inv Srvc, LLC , Mony Securities Corp, JP Morgan NTF, etc. The fund also has other classes to invest such as: Class A (DGCAX), Class C (DGCCX), Institutional Class (DGCIX), and Class R (DGCRX). The institutional class of this Delaware investment fund has only 0.79% expense ratio and there is no sales load.

Fund Composition

As of January 2012, this taxable bond fund has 296 holdings. The portfolio compositions are 94.90% in Credits, 2.80% in US Government Securities, and 2.3% in Municipal Bonds. The top 10 bond holdings include Georgia Pacific Corp, Massachusetts State Development Financial Agency R, Ameren Illinois Co, Poland Government International, Virgin Media Secured Financial P, Wisconsin Energy Corp, BB&T CapT TR IV, HSBC Bank plc, Lazard Group, and Abbey National Treasury Service. The top 6 sectors are Financial Institutions (26.3%), Utility (13.5%), Basic Industry (9.6%), noncorporate (9.2%), Communications (8.2%), and Consumer noncyclical (7.9%).

Disclosure: No Position

Note: Delaware Investments is a member of Macquarie Group

Other bond funds:

• Harbor Bond Fund (HABDX) 
• DoubleLine Total Return Bond (DLTNX)