Mutual Global Discovery Fund (TEDIX)

Investing in global arena is essential in current market. There are many vehicles to start this investment such as through global bond, and world stock / global equity. Mutual funds can provide an instant medium to achieve this diversification investment. In this article, I will provide one the best mutual fund in World Stock category.

World stock fund is an equity mutual fund invest primarily in companies located in various countries such as US (United States of America), Europe (Germany, France, Italy, United Kingdom, Spain, Switzerland, etc), Pacific (Japan, Australia, Korea), and many globes smaller markets. This fund can certainly represent world economy in our investment portfolio. One of the best rated world stock funds is Mutual Global Discovery fund. Details about this fund can be found below.

Mutual Global Discovery A (TEDIX)

Mutual Global Discovery fund details

This Mutual Global Discovery A fund is part of Franklin Templeton Investments fund. The Mutual Global Discovery fund objective is to provide capital appreciation. The fund invests majority of assets in undervalue equity securities (including convertible securities and preferred stock) of U.S. and foreign companies based on investment manager criteria. This fund also invests in merger arbitrage stocks and distressed companies. The fund expects to invest substantially and may invest up to 100% of its assets in foreign securities, which may include sovereign debt and foreign government debt.

Delaware Diversified Income Fund (DPDFX)

Finding a good bond fund can be challenging, there are several things to looks for the fund itself. Two of the most important things are the fund management and its long term performance. While investor likes to chase short term performance, over the long term horizon this may not be the right things to do. This next fund is Delaware Diversified Income fund. It is classified as intermediate term bond fund. This DPDFX fund has been one of the best performing funds over the long period time and it is also rated with the highest rating by Morningstar.

Delaware Diversified Income A (Ticker: DPDFX)

The Delaware Diversified Income fund is seeking maximum long-term total return, consistent with reasonable risk. This Delaware Investments fund invests in these four sectors of the fixed-income securities markets: the U.S. investment grade bond, the U.S. high-yield bond, the international developed markets bond and the emerging markets debts. It invests most of net assets (>80%) in fixed-income securities. The fund may hold a substantial portion of assets in cash or short-term fixed-income obligations. It may also use a wide range of hedging instruments. The fund may invest up to 15% of assets in emerging markets.

Lord Abbett Short Duration Income Fund (LALDX)

This next article will feature one of the highest rated short term bond funds, Lord Abbett Short Duration Income fund. This mutual fund is rated the best short term bond fund by Morningstar and USNews. Details about this fund are described below.

Intro

There are several safe places to invest during volatile market period. One of these includes short term bond funds. Short term bond fund is a mutual fund which invests most of its assets in bonds with maturities of less than a few years (2-5 years). These bond funds usually invest in corporate bond with a duration ranging from 1 to 3.5 years.

This type of bond fund is usually very popular when stock market becomes volatile. There are several reasons why investor or trader should invest in these funds:

• It provide better place to hide during short term period during volatile market
• It provides higher yield than current interest rates or any typical saving account
• It is less sensitive to fluctuating interest rates

Lord Abbett Short Duration Income A (Ticker: LALDX)

The Lord Abbett Short Duration Income fund objective is to provide a high level of income consistent with capital preservation. This Lord Abbett fund invests majority of net assets (>65%) in investment grade debt securities of various types. These securities may include short duration investment grade corporate debt securities (domestic and foreign in US denomination), U.S. Government securities, and mortgage- & other asset-backed securities. The fund may invest small part of net assets (<35%) in lower-rated debt securities (high yield or junk bonds), non-U.S. debt securities denominated in foreign currencies and floating or adjustable rate senior loans.

LALDX Fund Details

Lord Abbett Short Duration Income

• Fund Inception Date: November 1993
• Ticker Symbol: LALDX (Class A)
• CUSIP: 543916100
• Beta (3yr):  0.58
• Rank in Category (YTD): 20
• Category: Short-Term Bond 
• Type: Bond Fund
• Dividend Yield: 4.25%
• Load: 2.25%
• Dividend frequency: Monthly
• Capital Gains: If any, it will be distributed in December
• Numbers of Years Up: 15 years
• Numbers of Years Down: 2 years
• Average Coupon: 5.1%
• Effective Duration: 2.1 years
• Average Life: 3.1 years
• Number of holdings: 706
• Total Assets: $13.5 billion

updated on June 8th, 2011

Over the long period investment, this Lord Abbett Short Duration Income fund has been consistent performer with 15 positive years return and only 2 negative years return. This fund has experienced the worst 1-year total return in 2008 with -1.09% and best 1-year total return in 2009 with 16.96%. This fund has return 2.81% over the past year and 6.01% over the past 5-years. Morningstar has rated this bond fund with 5 stars rating.

This short term bond fund has been managed by Andrew H. O’Brien since January 1998. The fund annual expense is 0.60%. This fund does have 0.20% 12b1 fee and 2.25% front-end sales load fee. The fund current dividend yield is 4.25%.

The minimum initial investment needed to invest in the brokerage account in LALDX is $1,000 with no minimum subsequent investment. Should you be interested in IRA account, the initial investment is only $250. This LALDX can be purchased from 100 brokerages, include Ameriprise Brokerage, JP Morgan, Schwab RPS All, Raymond James, Royal Alliance, etc. 

The other classes of this fund are:

• Class C: LDLAX
• Class F: LDLFX
• Class I: LLDYX
• Class R2: LDLQX
• Class R3: LDLRX

With the total net assets of this fund $13.5 billion, the fund are allocated as follows 31.1% CMBS, 27.1% investment grade corporate, 19.4% high-yield corporate, 10.6% ABS, 6.9% MBS, 2.3% sovereign, 1.0% government related, 1.0% cash, and 0.7% others. The top largest holdings of this fund as of April 2011 are DirecTV Holdings LLC, Teck Resources Ltd, General Electric Capital Corporation, TBA Federal National Mortgage, FHLMC Multifamily Structured, Anglo American Capital Plc, Mosaic Co, and Bank of America Corp.

Principal investment risks are interest rate risk, credit risk, high yield debts risk, liquidity risk, mortgage related risk, foreign company risk, foreign currencies risk, convertible securities risk, senior loan risk, derivative risk, portfolio management risk, etc.

Disclosure: No Position

Other Short Term Bond Funds:

• Vanguard Short-Term Investment Grade VFSTX
• Weitz Short-Intermediate Income WEFIX
• Managers Short Duration Government MGSDX

Vanguard Wellesley Income Fund (VWINX)

Well known for its index funds, Vanguard also has several actively managed flagship funds such as Vanguard Wellesley Income, Vanguard Wellington, Vanguard Windsor, Vanguard STAR, PRIMCECAP Core etc. These funds also have impressive performance for the past decade.  This next article will discuss in details about Vanguard Wellesley Income fund. This fund is part of balanced fund with conservative allocation asset. This means this fund will invest in bonds and stocks. Most of the asset will be diversified into bonds and some are in stocks.

This type of fund will fit long term investor and short term investor with lower appetite to investment risk. This fund may provide instant asset diversification into fixed incomes and equities market. During the ups and downs market, this Vanguard fund has performed better. It is also has the highest rating from Morningstar. Details about this fund can be found below.

Top Balanced Fund

As one of the oldest mutual fund, this Vanguard Wellesley Income fund seeks to provide long-term income growth and a high and sustainable level of current income, along with moderate long-term capital appreciation. The fund invests most of its asset (60-65%) in investment-grade corporate, U.S. Treasury, and government agency bonds, and mortgage-backed securities (MBS). The rest of its assets (35% to 45%) are invested in companies’ common stocks that have a history of above-average dividends or expectations of increasing dividends.

10 Best Municipal Bond Closed End Funds 2011

A little info about CEFs

Closed End Fund or CEF is traded like stock. You can buy and sell or hold this fund through your favorite brokerage. The fund price may be traded on premium or discount from its fund’s Net Asset Value (NAV). This fund may be volatile than typical mutual fund hence it also uses a leverage to enhance its performance return. This leverage may also increase volatility and risk of the fund. Details about CEF can be found from my previous article.

National Municipal Bond CEF

Top Performer Muni bond CEFs

Similar to mutual funds, there are two main categories of fixed income closed end funds: Taxable Fixed Income and Tax Free Income or Non Taxable Fixed Income. Non Taxable fixed income CEFs are mainly focusing in Municipal bonds investment. These muni bonds are debt or obligation issued by a state, city, or other locality / municipality for general governmental needs or to finance specific projects. These muni bonds are attractive hence the interest is exempt from regular federal income tax. State specific bonds of the resident investors may also provide additional income free for the residents of those states.

For Muni bond closed end fund, this is one of the largest single categories in CEF. It offers many national municipal bond funds and 18 state specific Muni bond funds including New York, California, Texas, Florida, Minnesota, Illinois, etc.

The following 10 top performers are sorted based on its fund market price performance until June 2011. These funds were obtained from variety of financial website such as individual fund website, cefconnect, cefa, Morningstar, etc.

The 10 Top Performing Municipal Bond Closed End Funds June 2011 are:

1. BlackRock MuniHoldings Qty II (MUE)
2. EV Municipal Income (ENV)
3. Invesco Insured Municipal Bond (IMC)
4. Nuveen Municipal Advantage (NMA)
5. BlackRock Invst. Quality Muni (BKN)
6. BlackRock Municipal Income Inv (BBF)
7. Invesco Insured Muni Income (IIM)
8. PIMCO Municipal Income (PMF)
9. Nuveen Insured Quality Muni (NQI)
10. BlackRock MuniHoldings Quality (MUS)

Loomis Sayles Investment Grade Bond A (LIGRX) Fund

Bond fund can be essential for short term as well as long term investor. For short term investor, it can provide regular income and higher yield than regular saving account or certificate of deposit (CD). For long term investor, it can provide more stability to its long term portfolio asset. Although bond fund is riskier than traditional saving account, it is certainly less risky than equity fund. Choosing the right fund may be important to protect your investment capital. This next fund, Loomis Sayles Investment Grade Bond fund, is also bond fund with consistent performance for the past decade. It also has a well known management team. Details about this fund are described below.

Loomis Sayles Investment Grade Bond A (Ticker: LIGRX)

As part of Natixis Funds, Loomis Sayles Investment Grade Bond fund seeks high total investment return through a combination of capital appreciation and current income. This fund invest mainly in investment grade fixed income securities or bonds. It may invest <10% of assets in lower rated fixed income securities or non investment grade bonds. It may also invest any portion of its assets in Canadian issuers’ securities and < 20% in foreign issuers’ obligations including emerging market sector.

LIGRX Fund Details

Loomis Sayles Investment Grade Bond

• Fund Inception Date: December 1996
• Ticker Symbol: LIGRX
• CUSIP: 543487136
• Beta (3yr): 1.79 
• Rank in category (YTD):  2
• Category: Intermediate-Term Bond
• Dividend Yield: 4.53%
• Distribution frequency: Monthly
• Sales Load: 4.50%
• Effective Duration: 6.27 years
• Average Maturity: 9.61 years
• Number of holdings: 551
• Capital Gains: 0.05% (last distributed in May 2011)
• Number of Years Up: 13 years
• Number of Years Down: 1 year

updated on June 6th, 2011

Oakmark Equity & Income I (OAKBX) Fund

The next article is Oakmark Equity & Income fund which is Moderate Allocation Balanced Mutual fund. This type of fund is suitable for buy and hold investor. Hence it is a balanced fund; investor can get instant portfolio diversification. This Oakmark balanced fund is investing in bonds and equities and has 5 stars rating from Morningstar. Details about this fund's review are described below.

Oakmark Equity & Income I (OAKBX)

The Oakmark Equity & Income I fund objective is to provide current income, preservation and capital growth. The fund invests majority of its assets in a diversified portfolio of U.S. equity and fixed-income securities. It invests approximately 40-75% of total assets in common stock, convertible, and up to 60% of assets in U.S. government securities and debt securities rated within the two highest grades assigned by rating agencies. It may invest <35% of assets in Foreign securities.

OAKBX Fund Details

Oakmark Equity & Income I

• Fund Inception Date: November 1995
• Ticker Symbol: OAKBX
• CUSIP: 413838400
• Beta (3yr): 0.477
• Rank in category (YTD): 21
• Category: Moderate allocation
• Yield: 0.76%
• Turnover rate: 91%
• Total Net Asset: $20.4 billion
• Capital Gains: N/A
• Number of Years Up: 13 years
• Number of Years Down: 2 years

Updated on June 7th, 2011