Newly Rated Bond Funds Debut at a Bad Time

This month, two new bond funds made the list of more than 5,000 bond funds rated by TheStreet.com and, as expected, have made their debut at a very difficult time. Both funds have earned the lowest possible rating grade of E.

The current market returns, as shown by the one- and three-month figures, make it hard to swallow the 4.5% front load that these funds carry.

If you have to choose a category for bonds, the lower-risk Principal Inflation Protection Fund(PITAX Quote - Cramer on PITAX - Stock Picks), which invests in investment grade securities, would be an option. The inflation-protected bonds that it invests in are suited for the times. However, preservation of capital should be the overriding concern for investors at present, and investments in bond funds should be limited to short-term Treasuries.

Fund Name	Ticker	TSC Rating	1 Month Return	3 Month Return	Category	Front Load
Principal Infl Prot A	PITAX	E	0.8	-0.93	General Bd - Investment Grade	4.5
Principal Preferred Sec A	PPSAX	E-	-5.55	-3.72	US Government - Short & Interm	4.5