What are the Best Yielding Fixed-Income Mutual Funds?

The best yielding fixed-income mutual funds, also known as bond funds, have become a much more attractive prospect in light of the volatility the stock market has shown in the past decade. In fact, many of these fixed-income funds have grown at a steady clip of around 6 percent, which is much better than standard savings accounts and more profitable than many stock market investments have proven to be.

Like other types of investments, the best yielding fixed-income offer a range in terms of risk, return and administrative costs. We'll cover some of the cream of the crop to help you find the best yielding fixed-income mutual funds for your needs.

Higher Risk for Greater Return


If you have the stomach for greater volatility in your fixed-income investments, some of the best yielding fixed-income mutual funds are all-in-one bond funds, also known as multisector funds. These bond funds are put together by some of the best bond investors in the industry, with the flexibility to go anywhere in the bond marketplace to find the best return for your investment dollar.

Some of the top companies offering all-in-one bond funds include:

• Loomis Sayles Bond
• Pimco Unconstrained Bond
• T. Rowe Price Strategic Income

These bond funds have been crafted by some of the best minds in the investment community, but they are not without risk. In fact, some saw a larger decline during the recent economic slowdown than other types of bond funds, much to the chagrin of investors. For safer, more consistent bond funds, we have additional options below.

Top Taxable U.S. Bond Mutual Funds


Some of the best yielding fixed-income mutual funds in this category offer a decent return with low investment minimums and management costs. Most are products of Vanguard, which is a company that specializes in offering the best bond funds at the lowest possible costs to investors.

However, Fidelity also offers some of the best yielding fixed-income mutual funds available, although the company doesn't typically boast as many options as Vanguard in specific investment vehicles.

Many of the bond funds and fixed-income investments that fall into this category can be opened with as little as $3,000 and have a 20 percent or lower management expense ratio.

Best Returns in Bond Funds


If you are strictly looking at returns, many of the best yielding fixed income mutual funds have been offered by companies like Pioneer, ING and Rydex. These companies offer some impressive numbers over a three-month period.

For investors looking at the best one-year returns, companies like Fidelity and JHancock take the prize.

The best yielding fixed-income mutual funds over a longer period, such as three years, tend to come from a wider range of companies, including UBS, Principal, Neuberger Berman and Metropolitan West.

Finding the best yielding fixed-income mutual funds offers good returns with relatively low risk. With the stock market showing fairly volatile returns in recent years, the bond funds have picked up steam, much like the tortoise that captures the victory from the speedier hare.

If you are interested in making a profitable return without worry over the security of your investments, the best yielding fixed-income mutual funds may be the right answer for you.
Tim Ord
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