If you're looking for bond funds you may want to do it American style --
, that is.
The company best known for the largest stock fund in the world -- its $147 billion
Growth Fund of America behemoth -- is also one of the best places to put your money when looking for a bond play.
Every month TheStreet.com Ratings analyzes 5,000 bond funds and generates a top 200 list that highlights the best-rated and best-performing funds. Our latest list is dominated by the Capital Research & Management-owned American Funds family.
For the full year 2006, the breakdown of this list by asset class shows that two of the most prominent types of funds are corporate high-yield funds and general investment-grade funds.
With these two options, investors can choose, according to their own risk tolerances and risk/return criteria, whether they want to chase higher yields and higher risk via the Corporate High Yield market or reduce the level of risk by investing in investment grade bonds. A combination of both types of funds is also an option.
Below is a table highlighting the corporate high-yield funds that made our top 200 list. All funds in both tables are rated A plus by our models.
Our table for general investment-grade funds is below. Notice that the dividend yield and short-term returns of these funds are notably lower than the corporate high-yield market. This is, however, in line with the standard risk/return tradeoff.
Sam Patel, CFA, is the manager of mutual fund research for the TheStreet.com Ratings.
In keeping with TSC's Investment Policy, employees of TheStreet.com Ratings with access to pre-publication ratings data must pre-clear any potential trade through the legal department, and are prohibited from trading any security that is the subject of an unpublished rating revision until the second business day after the rating is published.
While Patel cannot provide investment advice or recommendations, he appreciates your feedback;
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