Top Performer World Bond Funds June 2011

With stabilizing world economy, fixed income investors will be wondering where to put their investment money. World bond funds offer instant portfolio diversification with investments in variety of bonds of different countries and sectors. This type of bond can mitigate the investment risks involved if some countries go bankrupt or are unable to pay their debt. This international bond fund may invest in US government bond or corporate bond, European bond, emerging market bonds, etc. This world bond funds may provide opportunity for investor to invest in fast growth developing countries (Indonesia, China, Russia, Brazil, etc) as well as other developed countries (German, France, Japan, UK, etc).

Top Performer World Bond Fund 2011

Several reasons to invest in these World Bond Funds are:

• These funds can provide global exposure hence it invest in bond markets worldwide
• These funds may provide attractive yield than domestic bond
• Investor can have direct access to experienced bond manager
• These funds may provide better return than domestic bond

The following list is compiled based on the fund performance in 2011 (up to June 2011). The fund is researched from various website and magazine like Morningstar, Yahoo Finance, Google Finance, USNews, etc. The 12 Top Performer World Bond Mutual Funds 2011 are:

1. Forward EM Corporate Debt Investor
2. Loomis Sayles International Bond A
3. Prudential Global Total Return A
4. Invesco International Total Return A
5. American Century International Bond Inv
6. GMO International Bond III
7. T. Rowe Price International Bond
8. EuroPac International Bond A
9. PIMCO Foreign Bond (Unhedged) A
10. Columbia International Bond A
11. Putnam Global Income A
12. Templeton Global Total Return A

T. Rowe Price High Yield Fund (PRHYX)

Bond funds are very popular among conservative investor as well as retiree. Bond funds can provide regular income to support personal expense, home improvement project, etc. One of the highest yielding bonds is known as high yield bond or non investment grade bond. This bond is also known as junk bond. This bond usually is lower rated than investment grade bond. It can come either from government bond (especially emerging market bond), and corporate bond.

For past article, I have provided the top performer high yield bond funds 2011 (up to May 2011). The following T. Rowe Price High Yield Fund is well known and has received various awards from various sources such as Morningstar, USNews , etc. Details about this fund will be described below.

T. Rowe Price High Yield Fund (Ticker: PRHYX)

TRP High Yield Fund details

This T. Rowe Price High Yield Fund is seeking high current income and some capital appreciation from bond portfolio. This T. Rowe Price fund will focus primarily on the higher-quality range (BB and B) of the high-yield market. The fund invests most of its net assets (>80%) in a broadly diversified portfolio of high yield corporate bonds or junk bonds, income-producing convertible bonds, and below investment grade preferred stocks. The fund's weighted average maturity is normally in the 5- to 10-year range.

Note: This non investment grade bonds represent a higher risk of default and tend to be more volatile than higher-rated bonds (i.e. investment grade bonds).

Vanguard Intermediate Term Treasury Fund (VFITX)

Bond mutual funds can invest in wide range of securities such as corporate debt, government securities, mortgage backed securities, asset backed securities, foreign bond, etc. This article will feature one of the intermediate government bond funds by Vanguard, Vanguard Intermediate-Term Treasury fund. This Vanguard fund invests mainly in treasuries securities or government bonds (including treasury bills, notes, and bonds). This government bond fund is usually considered one of the safest investments because they are backed by US government credit. The income from this bond is usually tax free from state and local taxes, but not from federal income taxes.

Most diversified bond fund may have about 10-40% of asset in government bond. Rule of thumb is to have some portion of your asset portfolio in this government bond fund. Note: Hence everyone is anticipating of double recession and debt woes, some of the diversified bond fund has reduced most of government bond from its assets. Recently, PIMCO Total Return fund has net short of this government bond in its fund portfolio.

Vanguard Intermediate-Term Treasury Investor (Ticker: VFITX)

The Vanguard Intermediate-Term Treasury fund seeks to provide a moderate and sustainable current income level. The fund mainly invests >80% of assets in U.S. Treasury bills, notes and bonds issued by U.S. Treasury. This Vanguard fund is anticipated to maintain a dollar-weighted average maturity of 5 to 10 years.

Top Performing Option Strategies Equity Closed End Funds 2011

Introduction

Closed End Fund is similar but different from mutual fund. Like Mutual Funds, Closed-End Funds also has various classes such as taxable bond CEF, Municipal bond CEF, US Equity Funds, Non US Funds, etc. Unlike mutual funds, these closed end funds (CEFs) are traded like stocks or equities. The funds also can be traded at premium or discount from its net asset value (NAV). These all features may provide additional incentive to invest in these funds.

Top Performer Option Equity CEFs 2011

One of these equity classes is Equity Options or Options Arbitrage or Option Strategies Funds. These Equity funds are also known as covered call strategy funds. These funds usually invest in collections of stocks with call options selling on either individual stocks or stock indices. Some other funds may also purchase put options to protect the portfolio from significant drops in stock market due to market volatility.

These funds usually provide high income and return from stock dividends, premium from selling call options, as well as increase of stocks values. Most of the fund may have high distribution rate or dividend yield. Please not some of the distributions may also include Return of Capital (ROC). These type of funds may be destructive to investor or shareholder.

The following top performers list has been compiled from variety of closed end fund website such as CEFA, CEFconnect, and Morningstar.

The 15 Top Performing Option Strategies Equity Closed End Funds June 2011 are:

1. Dow 30 Enhanced Premium & Income (DPO)
2. PIMCO Global StocksPLUS & Income (PGP)
3. Nuveen Core Equity Alpha (JCE)
4. NFJ Dividend Interest & Premium (NFJ)
5. ING International High Dividend Equity Income (IID)
6. BlackRock International Growth & Income Trust (BGY)
7. ING Global Equity Dividend & Premium Opportunity
8. AGIC International & Premium Strategy
9. BlackRock Global Opportunities
10. EV Tax-Managed Global Fund
11. NASDAQ Premium Income & Growth
12. Dow 30 Premium & Dividend Income
13. EV Tax-Managed Global Buy-Write Opportunities
14. Columbia Seligman Premium Technology
15. Cohen & Steers Global Income Builder

Funds details can be found on below table. The funds' information is updated on June 11th, 2011.

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