Bond Funds – Best & Worst Performers

Paulette Miniter discusses bond funds in her recent SmartMoney article, “Bond Funds Can Add Stability”.

Paulette recommends the traditional safe haven (bond funds) for times when there is stock market volatility instead of the trendy double-long oil or double-short stock choices.

Paulette asked Lipper Inc. to assist in finding the best and worst bond-index funds and fixed income ETFs. The search was limited to taxable bond funds and they cut out funds which require minimum investments above $5,000. The best and worst are below – sorted by expense ratios. It should be noted that there are three ETFs in the Best category and zero ETFs in the Worst category.

The Best

Name of Fund – Expense Ratio – 3 Year Annualized Returns
iShares Lehman 7-10 Year Treasury (IEF) – 0.15% – 5.66%
iShares Lehman 1-3 Year Treasury (SHY) – 0.15% – 4.89%
Vanguard Short-Term Bond (VBISX) – 0.18% – 4.76%
Vanguard interm. Bond (VBIIX) – 0.18% – 4.30%
iShares Lehman TIPS (TIP) – 0.20% – 6.02%

The Worst

Name of Fund – Expense Ratio – 3 Year Annualized Returns
Schwab Total Bond Market (SWLBX) – 0.53% – 2.12%
Schwab Short-Term Bond Market (SWBDX) – 0.56% – 2.21%
MainStay Indexed Bond (MIXAX) – 0.82% – 3.71%
Columbia US Treasury (LUTBX) – 1.32% – 3.94%
Nationwide Bond (GBIBX) – 1.33% – 3.12%

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