Diversified bond funds provide investors with a convenient and affordable option to hold a portfolio of bonds from different economic sectors. The costs incurred to create a portfolio of individual bonds would be significantly higher than investing in this class of funds. The associated risk also declines since volatility in a specific sector has only a partial effect on the fund’s fortunes. The opportunity to reinvest the income generated and a relatively higher level of liquidity also make them secure and attractive investments.

Below, we share with you three top-ranked diversified bond mutual funds, viz., PIMCO CommoditiesPLUS and Bond Alp PCLAX, Nuveen Preferred Secs & Inc NPSAX and Allspring Diversified Income Builder Fund EKSAX. Each has a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. Investors can click here to see the complete list of funds.

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