3 / 5 Stars
5 5 4 5 4
Zacks Investment Research
1 (Strong Buy)
Standard & Poor's
3 / 5 Stars
#6 in World Bond
U.S. News evaluated 97 World Bond Funds. Our list highlights the top-rated funds for long-term investors based on the ratings of leading fund industry researchers.
The fund has returned 1.19 percent over the past year, 4.49 percent over the past three years, 7.07 percent over the past five years, and 5.87 percent over the past decade.
|Trailing Returns||Updated 02.28.2014|
|Year to date||1.8%|
|3 Years (Annualized)||4.5%|
|5 Years (Annualized)||7.1%|
|10 Years (Annualized)||5.9%|
For investors who value predictability and safety but not the low returns that tend to come with them, here’s a steady bond fund that takes that middle route. The Dreyfus/Standish Global Fixed Income fund invests primarily in the lower-rated investment-grade bonds issued by stable countries and companies in the developed world.
As of March 05, 2014, the fund has assets totaling almost $397.05 million invested in 261 different holdings. Its portfolio consists of government and corporate bonds diversified among various credit ratings.
The fund’s strategy balances lower credit worthiness and longer bond durations with higher interest rates. This strategy allows the fund to put about 30 percent of its assets in bonds with interest rates above 6 percent. The fund’s top bond holding at the end of the third quarter was Australian government bonds, paying 6 percent. This, in turn, allows the fund to strive to pay out yields above 3 percent. Management appears to favor the United States (40 percent) and Western Europe (29 percent) above other areas of the globe. The fund has returned 1.19 percent over the past year and 4.49 percent over the past three years.
The fund also engages in quite a bit of currency hedging, and directs about 10 percent of its assets into emerging market bonds. In the last decade, the fund hasn’t had a year-end negative return even once. The fund has returned 7.07 percent over the past five years and 5.87 percent over the past decade.
The fund seeks to maximize its total return by normally investing a minimum of 80 percent of its assets in corporate and government debt, primarily those in stable and developed economies, but with some exposure to emerging markets. Management uses forward exchange rate contracts to make large-scale hedges on the currencies of European and North American countries. Management also uses macroeconomic and quantitative analysis to pinpoint assets that may receive credit upgrades.
The fund has had four managers during its 17 years. After Thomas Fahey left this spring, his former co-manager David Leduc took over the reins of the fund and made management a one-man job. It had been that way for the fund’s first eight years under Richard Wood, but the fund has been co-managed for much of the last decade. According to Morningstar, Leduc “also managed customized global corporate bond portfolios and has research responsibilities in European corporate markets.”
Dreyfus/Standish Global Fixed Income Fund has an expense ratio of 0.88 percent.
The fund’s attraction to bonds with longer durations makes it more susceptible to changes in interest rates.