A short-term government bond fund is a mutual fund that is limited by its investment objectives and fund by laws to investing primarily in short-term obligations of the federal government or its agencies. Depending on the fund’s definition, the short term can be up to five years.

 

Mutual funds investing in government debt securities are among the most secure options that provide regular income while protecting the capital invested. Funds that are part of this category bring a great deal of stability to a portfolio with a large proportion of equity. They provide dividends more frequently than individual bonds. Hence, these are considered the safest in the bond fund category and are ideal options for risk-averse investors.

 

Below, we share with you three top-ranked short-term government bond mutual funds, viz., PGIM Short Duration High Yield Income Fund (HYSAX Quick QuoteHYSAX - Free Report) , Lord Abbett Short Duration Income Fund (LALDX Quick QuoteLALDX - Free Report) , and Empower Short Duration Bond Fund (MXSDX Quick QuoteMXSDX - Free Report) . Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. Investors can click here to see the complete list of funds.

 

PGIM Short Duration High Yield Income Fund invests its assets in a variety of low-investment-grade, high-yield, fixed-income instruments, derivatives with a range of maturities and other similar investments.

 

PGIM Short Duration High Yield Income Fund has three-year annualized returns of 6.3%. Robert Cignarella has been one of the fund managers of HYSAX since 2014.

 

Lord Abbett Short Duration Income Fund seeks to generate a high level of income by investing largely in short-term U.S. government securities. LALDX offers monthly dividends and annual capital gains.

 

LALDX has an expense ratio of 0.58% compared with the category average of 0.68%.

 

Empower Short Duration Bond Fund invests most of its assets in investment-grade bonds. MXSDX advisors actively manage a portfolio of corporate bonds, asset-backed securities, commercial and residential mortgage-backed securities, U.S. treasuries, and agency securities.

 

Empower Short Duration Bond Fund has three-year annualized returns of 1.6%. As of December 2022, MXSDX had 2.6% of its assets invested in US TREAS NOTE BOND.

 

To view the Zacks Rank and the past performance of all short-term government bond mutual funds, investors can click here to see the complete list of short-term government bond mutual funds.

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