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TheStreet Open House

10 Best Funds for Monthly Income

NEW YORK ( TheStreet Ratings) -- TheStreet Ratings reviews the risk-adjusted return performance of around 25,000 funds every month. Answering the call for monthly income, some open-end bond funds generate a nice monthly income stream while maintaining a high ranking in our risk-adjusted return ratings. For savers seeking monthly income, this makes them worthy of consideration for 2012 portfolios.

Our list of the 10 Best Equity-Income Funds for 2012 is a good starting place for equity investors seeking income. However, investors with a less risk tolerance may prefer to produce income from bond funds. The 10 funds listed below are among the highest rated fixed-income funds generating a healthy level of monthly income and keeping expenses low.

Here are the 10 best fixed-income funds for monthly:

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10. Loomis Sayles Investment Grade Bond Fund

Loomis Sayles Investment Grade Bond Fund (LSIGX) seeks above average total investment return through a combination of current income and capital appreciation. The fund invests 80% of its net assets in investment grade fixed income securities, 10% of its assets in lower rated fixed income securities, and 10% of its assets in fixed income securities of any maturity. The fund invests 20% of its assets in securities of other foreign issuers, including emerging markets securities. The fund invests in mortgage related securities, including mortgage dollar rolls. The fund engages in futures transactions.

Expense Ratio: 0.48%

Load: 0.00%

Dividend Yield: 6.03%

Rated "A-" by TheStreet Ratings:

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9. Westcore Plus Bond Fund

Westcore Plus Bond Fund (WTIBX) seeks a long term total rate of return, consistent with preservation of capital, by investing primarily in investment grade bonds of varying maturities. The fund invests primarily in investment grade debt securities. The Fund may invest 80% of its net assets in fixed income securities and 20% in equity and equity related securities and may also invest 25% in foreign companies from developing and emerging markets.

Expense Ratio: 0.83%

Load: 0.00%

Dividend Yield: 4.04%

Rated "A-" by TheStreet Ratings:

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8. USAA Intermediate-Term Bond Fund

USAA Intermediate-Term Bond Fund (USIBX) has an investment objective to seek high current income. The fund strategy to achieve this objective is to normally invest at least 80 percent of fund assets in a broad range of investment grade debt securities. The fund may maintain a dollar weighted average portfolio maturity between three to ten years. The debt securities in which the fund invests may include, but are not limited to, obligations of U.S. state, and local governments, their agencies and instrumentalities, mortgage and asset backed securities, corporate debt securities, repurchase agreements and other securities believed to have debt like characteristics.

Expense Ratio: 0.69%

Load: 0.00%

Dividend Yield: 5.40%

Rated "A-" by TheStreet Ratings:

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7. Managers Bond Fund

Managers Bond Fund (MGFIX) seeks a high level of current income by investing primarily in fixed income securities. The fund may invest principally in investment grade debt securities of any maturity and invests at least 80 percent of its assets in bonds. The fund seeks to achieve incremental return through analysis of relative credit and valuation of debt securities. The fund invests at least 65 percent of its total assets in investment grade corporate bonds, mortgage-related and other asset-backed securities and securities issued or guaranteed by the U.S. Government, its agencies or instrumentalities. The fund may invest 10 percent of the total assets in non-U.S. dollar-denominated instruments.

Expense Ratio: 1.07%

Load: 0.00%

Dividend Yield: 4.82%

Rated "A" by TheStreet Ratings:

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6. T Rowe Price Summit Municipal Income Fund

T Rowe Price Summit Municipal Income Fund (PRINX) seeks a high level of income exempt from federal income taxes. The fund will invest at least 65% of total assets in long-term tax-exempt bonds. At least 80% of its total assets will be in investment-grade bonds, primarily in tax-exempt securities. To enhance income the fund may invest up to 20% of the total assets in non-investment-grade bonds known as junk bonds. The fund may buy securities of any maturity, and the weighted average maturity is expected to exceed 15 years.

Expense Ratio: 0.50%

Load: 0.00%

Dividend Yield: 4.11%

Rated "A+" by TheStreet Ratings:

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5. USAA Tax-Exempt Intermediate-Term Fund

USAA Tax-Exempt Intermediate-Term Fund (USATX) has an investment objective to provide the investors with interest income that is exempt from federal income tax. The fund invests primarily in investment grade tax exempt securities differentiated by maturity limitations. The dollar weighted average portfolio maturity of the fund is three and ten years. These securities include municipal debt obligations that have been issued by states and their political subdivisions and duly constituted state and local authorities and corporations as well as securities issued by certain U.S. territories.

Expense Ratio: 0.52%

Load: 0.00%

Dividend Yield: 4.22%

Rated "A+" by TheStreet Ratings:

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4. PIA BBB Bond MACS

PIA BBB Bond MACS (PBBBX) seeks to provide a total rate of return that approximates that of bonds rated within the BBB category by primarily investing in BBB rated bonds in the industrial, finance, and banking industries. The fund targets a weighted average duration between 5 and 8 years.

Expense Ratio: 0.12%

Load: 0.00%

Dividend Yield: 5.29%

Rated "A+" by TheStreet Ratings:

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3. ASTON TCH Fixed Income Fund N

ASTON TCH Fixed Income Fund N (CHTBX) seeks high current income. The fund invests at least 80% of its assets in bonds, primarily intermediate term investment grade fixed income securities. The portfolio manager uses a combination of quantitative and fundamental research in choosing securities. The fund invests in U.S. government securities corporate bonds debentures and convertible debentures zero coupon bonds mortgage asset backed securities Yankee bonds. The dollar weighted average maturity of the bonds in the fund is normally between three and ten years.

Expense Ratio: 1.11%

Load: 0.00%

Dividend Yield: 4.52%

Rated "A+" by TheStreet Ratings:

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2. Metropolitan West Total Return Bond Fund

Metropolitan West Total Return Bond Fund (MWTRX) seeks to maximize long term total return. The fund invests in a diversified portfolio of varying maturities issued by domestic and foreign corporations and governments with portfolio duration of two to eight years. Its portfolio includes bonds, notes, collateralized bond obligations, mortgage related and asset backed securities, and bank loans. The fund will invest at least 80% of its net assets in investment grade securities. The fund may borrow or short sell up to 25% of the value its total assets.

Expense Ratio: 0.64%

Load: 0.00%

Dividend Yield: 4.40%

Rated "A+" by TheStreet Ratings:

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1. Baird Core Plus Bond Inv

Baird Core Plus Bond Inv (BCOSX) has an investment objective to provide an annual rate of return, before expenses, in excess of the Barclays Capital US Universal Bond Index. The fund invests primarily in investment grade bonds. The fund may invest up to 20% of its net assets in non-investment grade debt securities. The fund may invest up to 100% of its total assets in cash or short term, investment grade securities as a temporary defensive position during adverse market, economic or political conditions and in other limited circumstances.

Expense Ratio: 0.55%

Load: 0.00%

Dividend Yield: 4.12%

Rated "A+" by TheStreet Ratings:

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How We Rate Funds

TheStreet Ratings condenses the available fund performance and risk data, including penalties for load charges, into a single composite opinion of each fund's risk-adjusted performance. This allows the unbiased identification of those funds that have historically done well and those that have underperformed the market. While there is no guarantee of future performance, these investment ratings provide a solid framework for making informed, timely investment decisions. In order to qualify for a rating, an open-end fund must either have three years of risk and return data or be an additional share class of an existing fund with at least three years of performance statistics.

Funds rated "A" or "B" are considered "Buy" based on a track record of higher than average risk-adjusted performance. Funds at the "C" level are rated as "Hold," while underperformers at the "D" and "E" levels our model ranks as "Sell."

-- -- Written by Kevin Baker in Jupiter, Fla.

MORE FROM THESTREET RATINGS:




Kevin Baker became the senior financial analyst for TheStreet Ratings upon the August 2006 acquisition of Weiss Ratings by TheStreet.com, covering equity and mutual fund ratings. He joined the Weiss Group in 1997 as a banking and brokerage analyst. In 1999, he created the Weiss Group's first ratings to gauge the level of risk in U.S. equities. Baker received a B.S. degree in management from Rensselaer Polytechnic Institute and an M.B.A. with a finance specialization from Nova Southeastern University.

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