Short-term bond funds primarily invest in corporate and other investment-grade fixed income securities, mainly from U.S. issuers. Such funds usually invest in securities that have a maturity period between a year to three years, as well as offer high liquidity. The interest from these bond funds is less in comparison to long-term bond funds. These funds are preferred by conservative investors as they are less sensitive to interest rates. Let’s take a look at the ten best performing short-term bond funds.
Ten Best Performing Short-Term Bond Funds
We have referred to the past one year return data of the bonds (from money.usnews.com) to rank the ten best performing short-term bond funds. Following are the ten best performing Short-term bond funds, in reverse order:
10. CM Advisors Fixed Income Fund (3%)
CM Advisors Fixed Income Fund (MUTF:CMFIX) mainly invests in fixed income securities that the fund believes are undervalued. The fund may invest in all types of fixed income securities. The fund has returned over 1% in the last three months and over 2% in the last three years. CMFIX has more than $29 million in total assets. The top three holdings of the fund are: United States Treasury Notes 2.75%, Allspring Treasury Plus MMkt Inst, and PHI Group Inc Ordinary Shares – New.
9. Frost Total Return Bond Fund (3%)
Frost Total Return Bond Fund (MUTF:FAJEX), under normal circumstances, invests in fixed income securities, including investment grade securities. At times, it may also invest in securities rated below investment grade. The fund has returned almost 1% in the last six months and almost 4% in the last three years. FAJEX has more than $3 billion in total assets. The top three holdings of the fund are: United States Treasury Notes 0.75%, United States Treasury Notes 2.875% and United States Treasury Notes 0.625%.
8. Payden/Kravitz Cash Balance Plan Fund (4%)
Payden/Kravitz Cash Balance Plan Fund Si Class (MUTF:PKBIX) has been designed as an investment vehicle for cash balance pension plans. This fund normally invests in a wide variety of debt instruments and income-producing securities. The fund has returned almost 1% in the last six months and over 4% in the last three years. PKBIX has more than $116 million in total assets. The top three holdings of the fund are: 2 Year Treasury Note Future Mar 22, Ultra 10 Year US Treasury Note Future Mar 22, and 10 Year Treasury Note Future Mar 22.
7. River Canyon Total Return Bond Fund (4%)
River Canyon Total Return Bond Fund (MUTF:RCTIX), under normal circumstances, invests in bonds, including mortgage-backed securities, debt securities, and other fixed income instruments from governmental or private-sector entities. The fund has returned almost 1% in the last six months and over 7% in the last three years. RCTIX has more than $1 billion in total assets. The top three holdings of the fund are: CSMC 2021-WEHO 4.05305%, CSMC 2021-BRIT 3.83284% and the United States Treasury Notes 0.5%.
6. Frost Credit Fund (5%)
Frost Credit Fund (MUTF:FCFBX) primarily invests in fixed income securities of U.S. and foreign corporate issuers. The fund has returned over 1% in the last six months and over 6% in the last three years. FCFBX has more than $183 million in total assets. The top three holdings of the fund are: Race Point IX CLO Limited/Corp 2.39129%, Golub Cap Partners Clo 21 M-R Ltd / FRN 2.57388% and Mcf Clo Viii Ltd / Mcf Clo Viii FRN 1.87225%.
5. DFA Short-Duration Real Return Port (5%)
DFA Short-Duration Real Return Portfolio Institutional Class (MUTF:DFAIX) mainly invests in a combination of debt securities. It may also invest more than 25% of its total assets in U.S. Treasury bonds, bills and notes. The fund has returned almost 3% in the last six months and almost 5% in the last three years. DFAIX has more than $1.90 billion in total assets. The top three holdings of the fund are: United States Treasury Notes 0.75%, Norway (Kingdom Of) 3% and the United States Treasury Notes 0.625%.
4. Destinations Low Duration Fixed (6%)
Destinations Low Duration Fixed Income Fund (MUTF:DLDFX) normally invests in bonds, debt, and fixed income producing instruments that are issued by the government or private-sector entities. The fund has returned over 2% in the last six months and almost 4% in the last three years. DLDFX has more than $580 million in total assets. The top three holdings of the fund are: iShares Core 1-5 Year USD Bond (NASDAQ:ISTB), T/L Mallinckrodt (OTC:MNKKQ) International Finance S.A Regd, and Fresh Market, Inc. 9.75%.
3. Thompson Bond Fund (6%)
Thompson Bond Fund (MUTF:THOPX) primarily invests in corporate bonds. Also, about 30% of its assets are currently in cash. The fund has returned almost 1% in the last six months and over 3% in the last three years. THOPX has more than $2.40 billion in total assets. The top three holdings of the fund are: General Electric Company (NYSE:GE), AmTrust Financial Services and Reinsurance Grp Amer.
2. Holbrook Income Fund (6%)
Holbrook Income Fund (MUTF:HOBAX) usually invests in fixed income instruments and may also put a maximum of 50% of its assets in the common and preferred stock of underlying funds. The fund has returned almost 1% in the last six months and almost 7% in the last three years. HOBAX has more than $670 million in total assets. The top three holdings of the fund are: First American Government Obligs X, Charah Solutions (NYSE:CHRA) and Ready Capital (NYSE:RC).
1. Angel Oak Financials Income Fund (7%)
Angel Oak Financials Income Fund (MUTF:ANFLX) mainly invests in debt issued by financial institutions, including subordinated debt, high yield securities, senior debt, preferred securities and trust-preferred securities. The fund has returned over 2% in the last six months and almost 3% in the last three years. ANFLX has more than $168 million in total assets. The top three holdings of the fund are: First American Government Obligs U, Kingstone Companies (NASDAQ:KINS), and Preferred Bank (NASDAQ:PFBC).