This is the third post in a series on my favorite mutual funds. The past two weeks we discussed my favorite domestic equity mutual funds and then my foreign stock fund picks. This week, we'll turn our attention to bonds.
I use 12 bond categories, including: short-term corporate; short-term government; intermediate-term corporate; TIPS; mortgage-backed; bank loan; emerging market; global; convertible; nontraditional; high yield; and municipals. Although I don't often invest in all categories at the same time (due to the economic environment), I do have favorites in each category. Here they are.
Intermediate-Term Corporate Bond
My favorite fund here is Metropolitan West Total Return I (MWTIX). Their management team has been in place for over 15 years and they have performed well in both up and down markets. During the past 11 years, they have been in the top quartile in Morningstar's ITB category seven times.
Another good choice here is Loomis Sayles Core Plus Bond Y (NERYX). They also have a stable management team (14+ years) and a great track record. It is, however, slightly more risky than the Metropolitan fund, but its returns have been commensurate with the added risk.
Short-Term Corporate Bond
I like Weitz Short-Intermediate Income I (WEFIX) for this sleepy group. Although there's not much to get excited about at this end of the maturity spectrum, Thomas Carney's 16.5 year tenure as manager has been a good one. His fund's performance has kept it in the top half of its peer group in each of the past nine years.
Short-Term Government Bond
My first choice here is Sit U.S. Government Securities (SNGVX). The management team has just over 17 years under its collective belt. Although their expense ratio is a little higher than I like, it is still below their category average and their returns have been excellent.
I'd also give an honorable mention to the Vanguard Short-Term Federal Inv fund (VSGBX).
It seems when I think of this category I think of Eaton Vance. Specifically, the Eaton Vance Floating Rate I (EIBLX). If Eaton didn't write the book on bank loan funds, they cut the trees used to make the paper. I recall in the early 2000s when bank loan funds (and shareholders) enjoyed a stable NAV. Today, it fluctuates like any other price per share. With eight years on the job, their management team has consistently delivered, making this a top pick.
To be continued next week.....
Thanks for reading and have a great week!