Loomis Sayles Bond Fund (LSBRX)

Find Loomis Sayles Bond Fund (LSBRX) review. This best mutual fund provides yield for income.

Bond funds or fixed income funds are typically less volatile than stock funds or equity funds. Bond funds also pay good yield or dividend regularly. This Loomis Sayles Bond Fund also has a monthly distribution. More details about this 4 stars rated fund by Morningstar can be found below.

Loomis Sayles Bond Fund (Ticker: LSBRX)

As the multisector bond fund, the Loomis Sayles Bond Fund seeks to achieve high total investment return through a combination of current income and capital appreciation using long-term and risk-adjusted investment strategy to beat its bond index, Barclays Capital US Government/Credit Bond Index. The Loomis Sayles fund invests majority of its asset in investment-grade fixed-income securities. It may also invest some of its assets in lower rated fixed income securities or junk bonds (<35%), preferred stocks (<20%), foreign debts including emerging markets (<20%), and Canadian issuers’ securities.

With its total net asset of $20 billion, this fund is managed by lead manager, Daniel J. Fuss, since 1989. Dan Fuss has managed this fund since its inception. He joined Loomis Sayles in 1976. As described above, this fund distributes a yield of 5.41% per year. This fund distribution is done monthly. The fund annual expense is 0.93%. This fund is part of no load mutual fund, this means there is no front end sales load and no deferred sales load.

If you have a brokerage account, you can start investing in this fund with $2,500 initial investment. For IRA account, please check with your account administrator or IRA brokerage provider for details. This Loomis Sayles Bond can be bought from 102 brokerages across the country like T. Rowe Price, Fidelity Retail FundsNetwork NTF, Dreyfus NTF, Ameriprise SPS Advantage, TIAA-CREF Brokerage Services, etc.

LSBRX Fact Details

• Fund Inception Date: May 1991
• Ticker Symbol: LSBRX (Retail Class or R-Class)
• CUSIP: 543495832
• Beta (3yr): 1.94
• Rank in category: 13 (ytd)
• Category: Intermediate term bond
• Distribution: Monthly
• Yield: 2.21%
• Expense Fee: 0.91%
• Capital Gains: If necessary, there will be capital gains on December and March
• Number of Years Up: 13 years
• Number of Years Down: 1 year

For the fund performance, this Bond fund has returned 11.66% over the past year and 7.91% over the past five years. The fund has its best return in 2009 with 36.83% return and the worst return in 2008 with -22.12% return. This LSBRX fund has 4 stars rating from Morningstar. The fund annual turnover rate is 27% which is low compare to its category (133.83%).

• Year 2017: 3.88% (YTD)
• Year 2016: 8.40%
• Year 2015: -7.06%
• Year 2014: 4.49%
• Year 2013: 5.52%

As of April 2011, this intermediate term bond fund consists of 643 bonds. The average maturity is 10.18 years and the weighted average duration is 6.08 years. The top 10 sectors distribution include high yield credit (23.15%), investment grade credit (22.73%), non-US dollar excluding CAD (20.79%), convertibles (10.66%), Canadian dollar (9.09%), preferred / equity (3.56%), US treasury (2.39%), MUNI (1.03%), bank loans (0.31%), and MBS (0.19%).Top 5 currency distributions are US dollar (70%), Canadian dollar (9%), New Zealand dollar, Norwegian Krone, and Euro. Top 5 holdings include Canadian government CAD, US Treasury bond, Norwegian government, Intel Corp CVT, and Ford Motor Co CVT.

new: Top Performer Diversified Bond Mutual Funds 2012

Investing in mutual fund involves variety of investment risks such as:

• Interest rate risk – interest rate rise and bond prices fall, investor may lose principal
• Credit risk – high yield bond price is more volatile due to market and credit risk
• Economic risk – foreign investment has greater risk due to global, political and currency risks

This fund is also available in many other classes such as institutional class (LSBDX), and admin class (LBFAX). These classes may provide lower expense fees.

Detail about the fund information and fund performance can be check on my Kip 25 best fund page.

Morningstar analysts has ranked this bond mutual fund with gold rating. For year 2011, this fund has an annualized return of 3.48%. As of April 2012, the top 4 sectors in its assets are corporate bond (51.88%), convertible (16.58%), non-U.S. government (9.92%), and preferred (3.09%). The average effective duration is 5.54 years and the average effective maturity is 10.09 years. The average credit quality is BB.

Loomis Sayles Bond Fund (LSBRX) was part of Kiplinger's best mutual fund before.

Harbor Bond Fund (HABDX)

Continuing with the Kiplinger 25 Best Fund of 2011 theme, the following is the next bond mutual fund for investor to invest in long term portfolio. Depending on your conform level, you can adjust the asset / portfolio level accordingly. This next fund is all about Harbor Bond Fund (Ticker: HABDX). Kiplinger typically updated its best fund list every year. This Harbor fund is also listed in the previous Kip 25 list. Harbor Bond fund is classified as intermediate term bond fund.

Harbor Bond Fund (Ticker: HABDX)

The Harbor Bond Fund is advised by Pacific Investment Management Company LLC (PIMCO). PIMCO is known as the largest bond fund operator in US and world with its PIMCO Total Return Bond fund. The Harbor Bond fund invests primarily in corporate and government-issued fixed income securities or debts. These debts can be located in the U.S. and foreign countries (up to 30%), including emerging markets or developing countries (up to 15%).

Intermediate Term Bond Fund

This Harbor Bond fund may invest >15% of total assets in below investment-grade (junk rated) domestic and foreign securities. The fund invests in intermediate term bonds with an overall portfolio rated high quality investment grade bonds.

This Harbor Bond fund is essentially very similar to PIMCO Total Return Bond fund, the world's biggest mutual fund. Both funds were run by Bill Gross since 1987. Bill Gross has been known as the bond guru for awhile and has shown an uncanny ability to consistently beat his benchmark. Harbor fund has sub-advised this fund for PIMCO to manage. The total net asset is $7.24 billion. The fund also has a yield of 3.05% per year. The annual expense ratio of this fund (0.55%) is lower than the average (0.94%).

HABDX fund details

• Fund Inception Date: December 1987
• Ticker Symbol: HABDX
• CUSIP: 411511108
• Beta (3yr): 0.91
• Rank in category (YTD): 49
• Category: Intermediate-Term Bond
• Yield: 2.55%
• Net Assets: $2.3 billion
• Expense Ratio: 0.51%
• Sales Load: 0% 
• Capital Gains: N/A
• Number of Years Up: 21 years 
• Number of Years Down: 2 years
• Average Duration: 3.55 years
• Average Maturity: 4.15 years
• Average Market Coupon: 3.06%
• Fund Manager: Mark R. Kiesel, Scott A. Mather, and Mihir P. Worah

updated on May 2017

For brokerage account and IRA account, investor will need $1,000 initial investment fund to start investing in this fund. This HABDX fund can be purchased from 78 brokerages like E*TRADE Financial, Pershing FundCenter, TD Ameritrade Institutional, Firstrade, etc. If you have a retirement account (401k or IRA), please check with your account administrator for details. The other class of this fund is Administrative Class (Ticker: HRBDX).

For the fund performance, this intermediate term bond mutual fund has returned 6.66% over the past year and 7.35% over the past 3 years. For long term performance, the fund has returned 7.50% over the past 5 years and 6.89% over the past decade. The fund has its best return in 2009 with 13.84% return and the worst return in 1999 with -0.32% return. This best rated bond fund has the highest Morningstar rating with 5 stars. The fund annual turnover rate is 675% which is considered high.

The performance of this fund is as below:

• Year 2017: 2.33% (YTD)
• Year 2016: 3.24%
• Year 2015: 0.23%
• Year 2014: 4.78%
• Year 2013: 1.46%

As of January 2011, this Harbor Bond fund has 1083 number of bonds. The yield to maturity is 4.46% and the average coupon is 3.3%. The weighted average maturity is 7.17 years and the weighted average duration is 5.38 years. Some of the top 10 fund issuers are Federal National Mortgage Association (FNMA), Federal Home Loan Mortgage Corp (FHLM), Wells Fargo & Co, Arkle Master Issuer plc, Citigroup Capital, and ING Bank NV MTN. This top 10 represent 23.4% of total holdings.

This fund’s top 10 sectors allocation as of March 2011 are 32.2% in Mortgage Pass-Through, 30% in Corporate Bonds and Notes, 5.0% in Foreign Government Obligations, 4.6% in Collateralized Mortgage Obligations, 3.3% in Municipal Bonds, 1.8% in U.S. Government Agencies, 1.4% in U.S. Government Obligations, 1.4% in Asset-Backed Securities, 0.5% in Convertible Bonds, 0.3% in Bank Loan Obligations and 0.2% in Preferred Stocks.

Investment risk

Investing in this fund involve risk such as interest rate risk, credit risk, prepayment risk, selection risk, derivative risk, foreign securities risk, short sales risk, mortgage risk, and high yield risk. Please check the fund prospectus for details about the investment risk. You can also invest in its administrative class with HRBDX fund ticker. This fund may need higher initial investment of $50,000. The fund also only charges a very low expense ratio of 0.80% per year.

Disclosure: No Position Other Bond Funds article:

• Loomis Sayles Bond Fund LSBRX
• Vanguard Short-Term Investment Grade VFSTX
• PIMCO Investment Grade Corporate Bond A PBDAX

Morningstar analysts has ranked this Harbor Bond fund with gold rating. It also has a yield of 2.15%. The total net assets are $7.5 billion. Its effective duration is 6.63 years. The top 3 sectors are agency MBS pass-through (14.3%), corporate bond (13.82%), and agency MBS CMO (12.4%).

Harbor Bond Fund (HABDX) was part of Kiplinger's Best Mutual Funds, KIP 25 before.

This fund is managed by Mark R. Kiesel, Scott A. Mather, and Mihir P. Worah since 2014.

Vanguard Short-Term Investment Grade Fund (VFSTX)

Vanguard Short-Term Investment Grade fund (VFSTX) is a popular bond mutual fund. This investment fund provide ample of yield.

This type of fund is useful in interest rate hikes situation. When the federal interest rate is increasing, you will need to have a short duration bond to protect your fund value. Since it is short term bond fund, the yield is smaller than other intermediate term or long term bond fund.

The funds in Kiplinger 25 best fund list are updated regularly. This Vanguard Short-Term Investment Grade is also part of 2010 fund list. As any Vanguard fund, it has low expense ratio and is part of no load mutual fund.

Vanguard Short Term Investment Grade (Ticker: VFSTX)

The Vanguard Short-Term Investment Grade fund investment objective is to provide current income to its investor while maintaining limited price volatility. This Vanguard fund will invest its assets in high and medium quality investment grade bonds with short term maturities (>80% of assets). It usually keeps an average weighted maturity of between 1 and 4 years. The fund may invest in U.S. government bonds, corporate bond or commercial paper, pooled consumer loans or bank obligations, and dollar-denominated foreign securities.

VFSTX Fund Facts

• Fund Inception Date: October 1982
• Ticker Symbol: VFSTX (Investor Shares)
• CUSIP: 922031406
• Beta (3yr): 0.53
• Rank in category: 43
• Category: Short Term bond
• Yield: 1.94%
• Distribution: Monthly
• Capital Gains: If necessary, there will be capital gains on December and March
• Fiscal Year End: January
• Number of Years Up: 26 years

DoubleLine Total Return Bond Fund (DLTNX)

DoubleLine Total Return Bond Fund (DLTNX) is one of the best mutual fund for financial investing. It provides yield for income.

Intermediate Term Bond

As part of DoubleLine Capital LP fund, the DoubleLine Total Return Bond fund investment objective is seeking to maximize total return. DoubleLine Capital LP was founded in 2009. This DoubleLine fund is distributed through Quasar Distributors, LLC. The fund invests most of its net assets (>80%) in debt securities / obligations.

It intends to invest more than half of net assets in mortgage-backed securities (MBS) of any maturity or type guaranteed by, or secured by collateral that is guaranteed by, the United States government and agencies, instrumentalities or sponsored corporations, or in privately issued mortgage backed securities. These bonds should be rated with Aa3/AA- or higher by nationally recognized rating agencies like Moody's and S&P.

DLTNX fund fact:

• Fund Inception Date: April 2010
• Ticker Symbol: DLTNX (N Shares)
• CUSIP: 258620202
• Distribution Rate / Yield: 3.46%
• Total Assets: $53.5 Billion
• Category: Intermediate Term Bond
• Capital gains: N/A
• Turnover Rate: 17%
• Minimum investment: $2,000

Top 10 Convertible Bond Mutual Funds of 2011 Part 2

As discusses in my previous part 1 article, convertible bonds can provide additional asset diversification for long term investor and income seeker trader. There are many benefits to invest in this asset class. The rule of thumb is having 2-5% of portfolio asset in this class.

Best Convertible Bond Mutual Funds

The following is part 2 of this article, this article will list the next 5 of 10 Best convertible bonds fund of 2011. The 10 Best convertible bond funds of 2011 (Part 2):

1. Calamos Convertible A
2. Fidelity Convertible Securities
3. Vanguard Convertible Securities Inv
4. Franklin Convertible Securities A
5. MainStay Convertible B
6. Putnam Convertible Income-Growth A
7. Allianz AGIC Convertible A
8. Columbia Convertible Securities A
9. Invesco Van Kampen Harbor A
10. Lord Abbett Convertible A

Putnam Convertible Income-Growth A (PCONX)

Putnam Convertible Income-Growth investment is seeking for both current income and capital appreciation. It as well aims for conservation of capital. The major net assets investment is in convertible securities with below investment-grade rating and investment-grade rating. The maturity level of these securities is three years or longer (intermediate- to long-term stated maturities).

Robert L. Salvin has managed this convertible bond fund since Dec 30, 2005. This fund has the 1.18% of annual expense ratio.The 12b1 fee is 0.25% and its front-end sales load is 5.75%. The minimum balance to invest in brokerage account of this fund is $500 (same applies for PCNBX, PRCCX and PCNMX), there is no IRA account available. The other class tickers of this fund are PCNBX, PRCCX, PCNMX, PCVRX and PCGYX. The PCGYX fund has the lowest expense ratio in this fund (0.93%).

The top ten holdings as of February 28, 2011 are Emc Corp/Massachusetts, Safeguard Scientifics, Wells Fargo, Chesapeake Energy Corp, Citigroup, El Paso Corp, Hertz Global Holdings, Sandisk Corp, Medtronic and The Interpublic Group of Cos. The top industry sectors as of February 28, 2011 are Technology (19.00%), Financials (16.51%), Consumer Cyclicals (13.85%), Health Care (11.19%), Miscellaneous (10.45%), Communication Services (9.96%), Energy (6.79%), Capital Goods (5.36%), Basic Materials (4.97%) and Cash & Net Other Assets (1.92%).

Allianz AGIC Convertible A (ANZAX)

The investment in Allianz AGIC Convertible Fund seeks for maximum total return. It means that it is aiming for both capital appreciation and current income. The net assets investment of this fund is 80% in convertible securities of any size market capitalization and 20% in nonconvertible debt securities. The convertible securities may include debentures, corporate bonds, notes or preferred stocks and their hybrids.

Douglas G. Forsyth has managed this fund since Dec 31, 1993. This fund has no yield distributed. The expense ratio of this fund is 0.96% per year. The 12b1 fee of this fund is 0.25% with 5.50% front-end sales load. This fund has returned 7.62% over the past three years and 6.22% over the past ten years. The minimum balance to invest in this best mutual fund is $1,000. No IRA account is available.

The purchase of this fund is limited to 19 brokerages such as Scottrade Load, JPMorgan, Fidelity Retail FundsNetwork, Ameriprise Brokerage, CommonWealth Core, Raymond James, CommonWealth Universe, RBC Wealth Management-Network Eligible, TD Ameritrade Retail and DailyAccess Corporation Mid-Atlantic. The other class tickers of this fund are ANNAX, ANZCX, ANZDX, ANNPX, ANCMX and ANZRX. Some asset classes of fund have lower expense ratio fee, and no front end sales charge fee.

The top sectors of this fund as of Feb 28, 2011 are Technology (19.93%), Healthcare (14.30%), Consumer Discretionary (13.82%), Industrials (10.55%) and Financials (10.24%). The top 10 holdings of this fund are EMC Corp (1.40%), Symantec Corp (1.40%), General Motors Co (1.37%), Liberty Media (1.36%), Fifth Third Bancorp (1.31%), Archer Daniels (1.30%), Stanley Black + Decker I (1.30%), Developers Divers R (1.30%), Enersys (1.28%) and Wesco International (1.28%).

Columbia Convertible Securities A (PACIX)

Columbia Convertible Securities investment seeks for total return consistent with capital appreciation and current income. The composition of the net assets investment of this fund is (up to) 80% in below investment-grade convertible securities, (up to) 15% in Eurodollar convertible securities and (up to) 20% in foreign securities.

David L. King has managed this fund since Apr 6, 2010. This fund has 3.14% yield. The expense ratio of this fund is 1.20% per year. There is a 0.25% 12b1 fee and 5.75% front-end sales charge fee. This fund has returned 17.55% over the past one year and 3.45% over the past five years. The minimum balance to invest in the brokerage account of this fund is $2,500 (applies for other class) and $1,000 for IRA account. The other class tickers of this fund are NCVBX, PHIKX and NCIAX. Among all classes, only NCIAX doesn’t apply the 12b1 fee.

Best Convertible Securities Mutual Funds of 2012

The top holdings of this fund as of Dec 31, 2010 are Citigroup (2.8%), Invitrogen (2.5%), Gilead Sciences (2.4%), General Motors Co (2.1%), Ford Motor Company (1.9%), EMC CORP (1.7%), Micron Technology (1.5%), MGM Mirage (1.5%), Alexandria Real Estate (1.5%) and Dollar Financial Corporation (1.5%). The assets allocation of this fund is as below convertible bonds (73.3%), preferred stock (22.0%), common stock (1.0%), corporate bonds (0.5%) and cash & equivalents (3.3%).

Invesco Van Kampen Harbor A (ACHBX)

The investment in Invesco Van Kampen Harbor seeks for both current income and capital appreciation, consistent with capital preservation. This ACHBX fund invests at least 50% in convertible debt securities, up to 45% in common stocks and up to 25% in foreign securities. For the investment reason, this fund may buy and then sell certain derivative instruments (options, futures contracts and options on futures contracts).

This convertibles fund is managed by Ellen Gold since Aug 23, 2001. The yield for this fund is 3.27%. The expense ratio is 1.04% annually. The 12b1 fee is 0.25% with 5.50% front-end sales charge fee. This fund has returned 6.78% over the past three years and 4.45% over the past ten years. The minimum balance to invest in either brokerage or IRA account of this fund is $1,000. The other class tickers of this fund are ACHAX, ACHCX, ACHJX and ACHIX . The ACHIX has the highest yield among all (3.48%) with no 12b1 fee and no sales load.

The top 10 holdings of this fund as of Feb 28, 2011 are Nielsen Holdings NV, EMC Corp, SBA Communication Corp., Virgin Media Inc., Micron Technology Inc., Chesepeake Energy Corp., Endo Pharmaceut Holdings In, Ciena Corp., Symantec Corp and Alliance Data Sys Corp. The top industrial sectors are Semiconductors (5.52%), Biotechnology (4.90%), Health Care Equipment (3.96%), Pharmaceuticals (3.79%), Internet Software & Services (3.55%), Wireless Telecommunication Services (3.12%), Computer Storage and Peripherals (3.09%), System Software (2.68%), Communication Equipments (2.45%) and Health Care Services (2.32%).

Lord Abbett Convertible A (LACFX)

Lord Abbett Convertible investment seeks for both current income and capital appreciation to result in a high total return. The net assets investment composition of this fund is at least 80% of net assets in convertible securities, up to 25% in investment grade convertible securities, up to 20% in non-convertible debt or equity securities and max of 20% in foreign securities and lower-rated convertible securities.

This balanced fund has been managed by Christopher J. Towle since Jun 30, 2003. This fund has the highest yield among the other mentioned in this list (3.79%). The expense ratio of this fund is the same as the average in the category (1.41%). There is a 0.20% 12b1 fee and 2.25% front-end sales charge fee.

This convertible bond fund has returned 4.33% over the past three years and 4.32% over the past five years. The minimum balance to invest in this fund is $1,000 for brokerage account and $250 for IRA account. This fund can be purchased from 92 brokerages such as Morgan Stanley Advisors, Pershing FundCenter, Schwab Institutional, Td Ameritrade, Inc., Scottrade Load, Merrill Lynch and Edward Jones. The other class tickers of this fund are LBCFX, LACCX, LBFFX, LCFYX, LCFPX, LBCQX and LCFRX. With the minimum investment of $1,000,000, LCFYX has the highest yield in the class (4.09%).

The ten largest holdings as of Feb 28, 2011 are Affiliated Manager Group, Inc. (2.1%), Informatica Corp. (2.0%), Ford Motor Co. (1.7%), Citigroup, Inc. (1.7%), Central Euro Distribution Co. (1.7%), General Motors Co. (1.6%), Archer-Daniels-Midland Co. (1.6%), Intel Corp. (1.5%), Apache Corp. (1.5%) and Bank of America Corp. (1.4%).

Disclosure: No Position

Fund Information

No	Mutual Funds Description	Ticker	Yield	Morningstar Rating	Net Assets (Mil)	Expense Ratio	Min to Invest
6	Putnam Convertible Income-Growth A	PCONX	2.68%	3	$718	1.18%	$500
7	Allianz AGIC Convertible A	ANZAX	N/A	4	$641	0.96%	$1,000
8	Columbia Convertible Securities A	PACIX	3.14%	3	$510	1.20%	$2,500
9	Invesco Van Kampen Harbor A	ACHBX	3.27%	4	$359	1.04%	$1,000
10	Lord Abbett Convertible A	LACFX	3.79%	3	$352	1.41%	$1,000

Note: If you need to check the fund performance, please check my first article.

Best Convertible Bond Mutual Funds of 2011

There are several advantages for investors to invest in convertible securities mutual funds. One of them are getting a regular income. These posts will look into the best convertible mutual funds of 2011 including: Calamos Convertible A, Fidelity Convertible Securities, Vanguard Convertible Securities Inv, etc.

Convertibles Mutual Funds

With interest rate hikes are looming, investing in convertible bonds can be attractive to investors and/or traders. Convertible bonds can provide additional investment portfolio diversification. There are several ways to invest in convertible bonds. Investors can invest in individual convertible bonds, mutual fund, closed end fund (CEF), and exchange traded fund (ETF).

Convertible bond buyers or investors usually invest in these asset classes in the hope of obtaining one or more of the following benefits:

• Investor can participate in upside movement should the stock price increase
• Investor can limit his/ her loss should the stock price decrease
• Convertible bonds provide higher yield than regular dividend from company's common stock
• The price movement of the bond is less volatile than common stock. Convertible bonds traditionally have had a low correlation with fixed income obligations and high, but imperfect, correlation with equities / stocks
• If the company files for bankruptcy, investor can claim on the issuer's assets senior first to that of the holders of the common stock

How are the funds selected?

These funds are rated based on their asset, Morningstar rating, and expense ratio. These funds have big assets. Big asset means the fund has attracted variety of retail investor and institutional investor to invest in these funds. Most of these funds also have a respectable Morningstar rating of 3 or more stars. With 3 or more star rating, this means the fund has consistently performed under any market condition (bear or bull market) and should perform better than many of its index benchmark. These funds also paid dividend either monthly or quarterly.

The 10 Best Convertible Bonds Mutual Fund of 2011 (Part 1):

1. Calamos Convertible A
2. Fidelity Convertible Securities
3. Vanguard Convertible Securities Inv
4. Franklin Convertible Securities A
5. MainStay Convertible B
6. Putnam Convertible Income-Growth A
7. Allianz AGIC Convertible A
8. Columbia Convertible Securities A
9. Invesco Van Kampen Harbor A
10. Lord Abbett Convertible A

Calamos Convertible A (CCVIX)

The investment in Calamos Convertible fund primarily is seeking for current income while the capital growth is the secondary purpose. This fund invests the majority (around 80%) of its net assets in convertible securities issued by U.S. and foreign companies. There is no limitation of the market capitalization. The remaining assets might be invested in foreign securities. This fund will be closed to all purchases of shares and exchanges, with limited exceptions, as of January 28, 2011.

John Calamos the founder of Calamos Assets Management has managed this fund since 1985. The company is the 16th largest money manager in Chicagoland. This fund has 1.08% expense ratio per year.

The yield of this fund is 2.73%. There is 0.25% 12b1 fee and 4.75% of front-end sales load. This convertibles fund has returned 11.74% over the past one year and 5.16% over the past five years.

The minimum balance to invest in this fund is $2,500 for brokerage account (same applies for CALBX and CCVCX) and $500 for IRA account. This fund can be purchased from 89 brokerages include Schwab Institutional, TD Ameritrade, Inc., Scottrade Load, JPMorgan, Vanguard and Schwab Retail. The other class tickers of this fund are CALBX, CCVCX, CICVX and CCVRX. Eventhough CALBX and CCVCX have the same minimum initial investment, but they have higher expense ratio (1.82%) compared to CCVIX.

The top 10 holdings of this fund are EMC Corp (4.6%), SanDisk Corp (3.4%), Intel Corp (2.6%), Archer-Daniels-Midland Company (2.6%), NetApp, Inc (2.4%), Apache Corp (2.2%), Teva Pharmaceutical Industries Ltd (1.9%), Gilead Sciences Inc (1.8%), Symantec Corp (1.6%), and Navistar International Corp (1.5%). These top 10 companies make up to 24.6% of its total assets. The top sectors of this fund are Information Technology (33.8%), Health Care (15.3%), Energy (10.3%), Industrials (8.4%), Materials (7.6%), Consumer Discretionary (6.6%), Consumer Staples (5.2%) and Financials (4.3%).

Fidelity Convertible Securities (FCVSX)

Fidelity Convertible Securities investment seeks for both current income and capital appreciation. The major net assets investment of this fund is in convertible securities with below investment-grade rating or unrated securities. This best fund may also invest in corporate or U.S. government debt securities, preferred stocks, money-market instruments, and common stocks.

Thomas T. Soviero has been the lead manager since June 21, 2005. This fund has quite low annual expense ratio (0.59%) compared to the average in 1.41%. This fund has a total of $2.72 billion net assets. It doesn’t have any 12b1 fee and front-end sales load. This fund has returned 7.10% over the past five years and 6.80% over the past decade. The minimum balance to invest in this fund and the other class is $2,500 for brokerage account. You can also purchase this fund through Fidelity Advisors fund. The other class tickers of this fund are FCAVX, FCBVX, FCCVX, FICVX and FTCVX. Only FICVX doesn’t have any 12b1 fee and front-end sales load.

The top ten industry sectors of this fund as of Jan 31, 2011 are Energy (23.02%), Information Technology (17.74%), Consumer Discretionary (12.97%), Industrials (12.92%), Financials (12.89%), Health Care (6.99%), Consumer Staples (3.77%), Materials (3.45%) and Telecommunication Services (2.28%). The top ten company holdings are Peabody Energy Cv (4.75%), El Paso Corp (4.99%), Wells Fargo (7.5%), General Motors (4.75%), Ford Motor Conv (4.25%), Intel Conv (3.25%), Celanese Corp Ser A, Chesapeake Enrg Cv (2.5%), Hertz Global Conv (5.25%) and Alpha Nat Res Conv (2.375%). These top 10 holdings make up to 35.62% of the total net assets out of 132 total holdings.

Vanguard Convertible Securities Inv (VCVSX)

Vanguard Convertible Securities Investor investment is looking for both current income and long-term capital appreciation. The primary net assets investment is in convertible securities. These convertible securities have the below investment-grade rating and combine the investment characteristics of bonds and common stocks. They consist of corporate bonds and preferred stocks that are convertible into common stock.

This fund is managed by Larry Keele since Nov 1, 1996. This fund has 3.64% yield and 0.68% annual expense ratio (the lowest among all mentioned in this list). The minimum balance to invest in this fund is $10,000 for brokerage account and IRA account. This fund applies no 12b1 fee and no sales load. This fund has returned 23.85% over the past one year and 7.82% over the past ten years.

The top 10 holdings of this fund as of Feb 28, 2011 are Micron Technology Inc Cvt, SBA Communications Corp Cvt, General Motors Co Pfd, Interpublic Group of Cos Inc Cvt, Gilead Sciences Inc Cvt, MGM Resorts International Cvt, Equinix Inc Cvt, ArvinMeritor Inc Cvt, Lennar Corp Cvt and Owens-Brockway Glass Container Inc Cvt. These ten largest holdings make up to 22.5% of total net assets and 22.8% of equities.

Franklin Convertible Securities A (FISCX)

Franklin Convertible Securities investment pursues for maximizing the total investment return with considering the consistent reasonable risk. The major net assets investment is in convertible securities including the common stocks received upon conversion of convertible securities. This fund may also invest in other securities, such as common or preferred stocks and non-convertible debt securities. As of Jan 31, 2011 the composition of its net assets investment is 65.00% in convertible bonds, 29.00% in convertible preferred and 6% in cash.

Alan Muschott has managed this fund since Jul 1, 2002. He is as well the vice president of the Franklin Advisers, Inc. This fund has 1.22 billion net assets. The yield for this fund is 3.23%. This fund has 0.90% annual expense ratio which is quite low compared to the average in 1.41%. The 12b1 fee is 0.25%. This fund has returned 5.67% over the past three year, with 5.64% of 5-year average return. Minimum balance to invest in brokerage account of this fund is $1,000 and $250 for IRA account.

This fund can be purchased from 60 brokerages such as Morgan Stanley Advisors, Pershing FundCenter, Schwab Institutional, Td Ameritrade, Inc., JPMorgan and Merrill Lynch. The other class tickers of this fund are FCSZX and FROTX. The expense ratio for FCSZX is 0.65% and 1.65% for FROTX.

Best Convertible Securities Mutual Funds of 2012

Top 10 holdings of this fund as of Jan 31, 2011 are WESCO International Inc (2.90%), Microchip Technology Inc (2.30%), NetApp Inc (2.30%), Dendreon Corp (2.20%), SandRidge Energy Inc (2.10%), Salix Pharmaceuticals Ltd (2.10%), Alliance Data Systems Corp (2.10%), Apache Corp (2.00%), Micron Technology Inc (2.00%), and Citigroup Inc (2.00%). These top 10 holdings make up to 22.00% of the total portfolio. The top sectors breakdown are Information Technology (22.20%), Health Care (21.30%), Consumer Discretionary (13.60%), Industrials (9.90%), Energy (8.40%), Financials (6.40%), Materials (5.90%), Utilities (4.60%) and Consumer Staples (1.40%).

MainStay Convertible B (MCSVX)

The investment in MainStay Convertible is looking for both current income and capital appreciation. The primary net assets investment (at least 80% of total) is in investment-grade convertible securities. The other investment options include equity securities, nonconvertible corporate debt, cash or cash equivalents and U.S. government securities. This fund has a total of 1.04 billion net assets.

Edward Silverstein has been the fund manager since May 1, 2001. This fund has 1.18% yield. The expense ratio of this fund is 2.03% per year. This fund has 1.00% of 12b1 fee but no sales load. The minimum balance to invest in either brokerage or IRA account of this fund is $1,000. The other class tickers of this fund are MCOAX, MCCVX, MCNVX and MCINX. Some other class has lower expense ratio.

Top ten holdings of this fund are JPMorgan Chase & Co (3.5%), Core Laboratories LP (2.7%), Cameron International Corp (2.6%), Teva Pharmaceutical Finance Co BV (2.5%), Citigroup Inc (2.2%), Fisher Scientific International Inc (2.1%), Incyte Corp Ltd (2.0%), BioMarin Pharmaceuticals Inc (2.0%), Peabody Energy Corp (2.0%), and Allegheny Technologies Inc (1.9%). The top sectors of this fund are Consumer Non-Cyclical (24.8%), Energy (21.1%), Communications (11.0%), Technology (9.7%), Consumer Cyclical (9.7%), Industrials (6.5%), Financials (6.2%), Asset-Backed Securities (1.9%), Basic Materials (1.7%) and Utilities (0.6%).

Disclosure: No Position.

Fund Info

No	Mutual Funds Description	Ticker	Yield	Morningstar Rating	Net Assets (Mil)	Expense Ratio	Min to Invest
1	Calamos Convertible A	CCVIX	2.73%	4	$3,660	1.08%	$2,500
2	Fidelity Convertible Secs	FCVSX	2.81%	2	$2,720	0.59%	$2,500
3	Vanguard Convertible Securities Inv	VCVSX	3.64%	5	$2,130	0.68%	$10,000
4	Franklin Convertible Securities A	FISCX	3.23%	3	$1,220	0.90%	$1,000
5	MainStay Convertible B	MCSVX	1.18%	3	$1,040	2.03%	$1,000

Details on next 5 funds can be found on Top Convertible Bond Mutual Funds pt 2. The following table show the fund performance for 1 year, 3 year, 5 year, and 10 years. Please check my part 2 for the next 5 of these convertible bond funds.

updated on 4/28/2012

Dodge & Cox Income Fund (DODIX)

Kiplinger is a well known financial magazine. Any long term investor will know this magazine in a heart beat. Every year, the magazine provides a list of top 25 mutual funds which is known as Kiplinger 25 (in short Kip 25) around spring time. I’ll provide one of this best fund every couple days, I'll review the funds in details. The following article will look into the first fund, Dodge & Cox Income.

I’ll proceed from bond fund and then move to stock funds, international funds, etc. All of these funds are no load funds. This means the funds don’t charge any sales fee such as front end sales load fee or deferred sales load fee.

Dodge & Cox Income Fund (DODIX)

This Dodge & Cox Income fund (Ticker: DODIX) investment objective is to seek a high & stable rate of current income with consistent long term capital preservation. It also will try to take advantage of opportunities to realize capital appreciation. The fund invest majority of its assets in a high quality bond (i.e. investment grade bond) and other fixed income debts diversified portfolio.

These fixed income securities include U.S. Government bonds, mortgage and asset backed securities, corporate bond, collateralized mortgage bonds and other rated A or better bonds rated by credit rating agencies (Moody’s, Standard & Poor’s, Fitch, etc). This Dodge & Cox fund may invest small part of its assets (<20%) in non investment grade fixed income securities. These below investment grade bonds are known as high yield bonds or junk bonds.

DODIX Fund Facts

• Fund Inception Date: January 1989
• Ticker Symbol: DODIX
• CUSIP: 256210105
• Distribution: Dividend are paid every quarters in March, June, September, & December
• Capital gains: If any, they will be distributed in December and March
• Net Assets: $ 48.9 Billion
• Fund Manager: Dodge & Cox Management
• Beta (3yr): 0.94
• Category: Intermediate-Term Bond
• Yield: 1.28%
• Expense Fee: 0.43%
• Min to Invest: $2,500
• Capital Gains: N/A
• Turnover rate: 25%

The fund lead manager is Peter C. Lambert since 1989. The fund is also managed by variety of managers. To invest in this fund, you will need to open an account either with your brokerage or IRA account (Roth IRA, traditional IRA, and 401k).