IntroA world bond mutual fund or global bond mutual fund is a fixed income mutual fund which put its assets in foreign debt markets. Typically, its asset consists of >40% of foreign bonds. Some of the countries include United States, Canada, United Kingdom, German, France, Brazil, China, Japan, etc. It may include either government bond or corporate bond.
Investing in world bond funds is one of the best ways to balance losses incurred from US markets. With fluctuation in interest rate from country to country, investor can avoid high volatility of bond market from single country. This international bond mutual fund has showed little correlation with domestic equities and only moderate correlation with investment grade domestic debt. This fund also helps in diversifying currency exposure and protecting assets against a long-term secular decline in the U.S. dollar currency. Choosing mutual funds offer a safe route to invest in the international bond market hence they have widely diversified holdings.
Best World Bond Mutual Funds
These best world bond mutual funds are selected based on its performance for the past 5 years. Most of these international bond funds are also rated among the best in their class. You may also find the fund review from this article including information such as its management, performance, sales load, expense ratio, initial investment requirement, risk, top holdings, etc.
Top 8 Best World Bond Mutual Funds of 2012 are:
- Dreyfus International Bond A (DIBAX)
- Templeton Global Bond A (TPINX)
- PIMCO Foreign Bond (Unhedged) A (PFUAX)
- Maxim Templeton Global Bond (MXGBX)
- ING Global Bond A (INGBX)
- Legg Mason BW Global Opportunities Bond A (GOBAX)
- Delaware International Bond A (DPIFX)
- Prudential Global Total Return A (GTRAX)
1. Dreyfus International Bond A (DIBAX)
The investment aim of Dreyfus International Bond fund is to maximize total return including capital appreciation and income. This world bond fund uses its net assets to purchase non-U.S. dollar denominated fixed-income securities including foreign governments and companies located in various countries, including emerging markets.
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| Dreyfus International Bond |
Brendan C. Murphy is the current lead manager of this top world bond mutual fund. The minimum initial investment for brokerage account is $1.000 and $750 for retirement account. The benchmark of this fund is Barclays Capital Global Aggregate ex-U.S. Index.
As of January 2012, the top sector allocations are Non-U.S. Government (61.23%), Securitized (12.74%), and Corporate – Investment Grade (12.10%).
2. Templeton Global Bond A (TPINX)
The Templeton Global Bond fund objective is to achieve current income with capital appreciation and income growth. This mutual fund invests majority of net assets (>80%) in bonds of governments and government agencies located anywhere in the world. The investment may include debt securities of any maturity, such as bonds, notes, bills and debentures.
Morningstar analysts have rated this global bond mutual fund with Gold rating. It also has 5-stars rating for its performance. The total net assets of this fund are $59.56 billion. The 3-year annualized return is 10.95%. This fund has annual expense ratio of 0.88%.
The asset mix of this best bond fund as of January 2012 is Bonds (89.00%) and Cash (11.00%). The top currencies are Americas and Asia.
3. PIMCO Foreign Bond (Unhedged) A (PFUAX)
The PIMCO Foreign Bond (Unhedged) mutual fund invests >80% of assets in Fixed-Income Instruments that are economically tied to foreign (non-U.S.) countries, representing at least 3 foreign countries. It may use forwards or derivatives such as options, future contracts or swap agreements.
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| PIMCO Foreign Bond (unhedged) |
The other classes of this fund include: Class C (PFRCX), Class D (PFBDX), Class Admin (PFUUX), Class Institutional (PFUIX), and Class P (PFUPX). The Class P of this PIMCO mutual fund has total annual operating expenses of 0.60%, and there is no sales charge.
The top countries are Germany (39.80%), United Kingdom (23.10%) and Japan (15.60%). This data is as of January 2012. This fund has 5-year annualized return of 9.83%.
4. Maxim Templeton Global Bond (MXGBX)
The investment objective of Maxim Templeton Global Bond fund is to provide current income with capital and income appreciation. This fixed income mutual fund generally uses majority of its net assets to buy bonds issued by governments and government agencies located around the world.
Best Emerging Markets Bond Mutual Funds 2012
The fund has 12-month dividend yield of 4.76%. The annual expense ratio of this fund is 1.30%. The annual holdings turnover of this Maxim Series fund as of February 2012 is 21.69%. Michael Hasenstab is the current fund manager. He started managing it in July 2005. This mutual fund is similar to previous Templeton Global Bond fund.
This mutual fund has 10-year annualized return of 8.35%. It has 4-stars rating from Morningstar. The fund has recorded 11 years of positive return within its 12 years in the market. The best 1-year total return was in 2006 (14.85%).
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| ING Global Bond |
The ING Global Bond fund invests most of net assets in investment grade bonds of issuers in a number of different countries (including the United States). It may invest in securities of issuers located in developed and emerging-market countries.
This world bond mutual fund has YTD return of 2.93%. The 3-year annualized return is 8.3%. The fund is currently managing by Christine Hurtsellers. She is the Chief Investment Officer, Fixed Income and Proprietary Investments for ING Investment Management.
The most recent dividend received by its investor on February 2012 is $0.04. This best world bond mutual fund has always managed to achieve good performance return since its inception. The YTD return is 2.93%.
The top country weightings as of January 2012 are United States (44.92%), Brazil (10.43%), Mexico (4.61%), South Africa (4.28%) and France (4.26%).
6. Legg Mason BW Global Opportunities Bond A (GOBAX)
The Legg Mason BW Global Opportunities Bond mutual fund objective is seeking to maximize total return consisting of income and capital appreciation. This Legg Mason fund invests assets mainly in debt and fixed-income securities of domestic and foreign issuers located in developed countries. It also invests small part of its assets (<30%) in below investment-grade securities and (<25%) in convertible debt securities. It is considered as non-diversified mutual fund.
This best global fund has annual expense ratio of 0.91%. This bond mutual fund has total net assets of $1.23 billion. Morningstar rating of this fund is 4-stars. The dividend yield is 3.32%.
This top performer fund is currently managed by David F. Hoffman. He started to manage this fund in 2006 with the Institutional class. This fund is available for purchase from 27 brokerages.
7. Delaware International Bond A (DPIFX)
This Delaware International Bond fund is part of load mutual fund. It has a sales load of 4.5%. It has a dividend yield of 29.43% over the past 12 months. It only has $11.6 million total net assets. This fund is currently limited to new investors. The expense ratio is 0.72%.
8. Prudential Global Total Return A (GTRAX)
As part of world bond mutual fund, the Prudential Global Total Return fund has rated with 4 stars by Morningstar. The expense ratio is 1.35%. The minimum initial investment is $2,500. Its annual holding turnover rate is 203%. The yield of this world bond fund is 4.81%.
Disclosure: No Position
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Fund Performance
| No | Name | Ticker | 1 Year Return % | 3 Year Return % | 5 Year Return % | 10 Year Return % | Expense Ratio |
|---|---|---|---|---|---|---|---|
| 1 | Dreyfus International Bond A | DIBAX | 5.09% | 11.39% | 10.68% | - | 1.09% |
| 2 | Templeton Global Bond A | TPINX | 3.36% | 10.95% | 10.28% | 11.59% | 0.89% |
| 3 | PIMCO Foreign Bond (Unhedged) A | PFUAX | 10.18% | 15.01% | 9.83% | - | 0.90% |
| 4 | Maxim Templeton Global Bond | MXGBX | 3.90% | 8.51% | 9.32% | 8.35% | 1.30% |
| 5 | ING Global Bond A | INGBX | 6.45% | 8.40% | 9.27% | - | 0.90% |
| 6 | Legg Mason BW Global Opps Bd A | GOBAX | 11.37% | 16.26% | 8.99% | - | 1.00% |
| 7 | Delaware International Bond A | DPIFX | 6.52% | 9.38% | 8.80% | 9.90% | 1.10% |
| 8 | Prudential Global Total Return A | GTRAX | 8.13% | 13.82% | 8.59% | 7.09% | 1.39% |
| 9 | Wells Fargo Advantage Intl Bond A | ESIYX | 6.10% | 9.12% | 8.52% | 9.44% | 1.03% |
| 10 | Putnam Global Income A | PGGIX | 3.68% | 17.04% | 8.38% | 8.25% | 1.14% |
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