Short-Term Bond Fund Yields

The safest class of bond funds is the category classified as short-term government bond funds. These funds hold a high percentage of U.S.-government securities like Treasuries and agency paper and/or AAA-rated bonds or commercial paper. The prices of these funds are typically less volatile due to the shorter average duration of the holdings in the portfolio. The recent turmoil in the mortgage and credit markets makes this an ideal time to test the returns generated by the portfolio managers of these type of funds. Listed below are funds rated 4-stars or 5-stars by Morningstar and among the funds with the highest year-to-date returns in their category.

Institutional Short-term U.S. Government Funds

(1) Vanguard Short-Term Treasury ADM (VFIRX) - YTD return 4.81%, 4.55% yield, minimum investment $100,000

(2) JP Morgan Treasury and Agency Select (OGTFX) - YTD return 4.34%, 5.09% yield, minimum investment $1,000,000

(3) Goldman Sachs Short Duration Government (GSTGX) - YTD return 4.17%, 4.21% yield, minimum investment $1,000,000

Retail Short-term U.S. Government Funds

(1) State Farm Interim Fund (SFITX) - YTD return 6.82%, yield 4.06%, $250 minimum investment

(2) Vanguard Short-Term Treasury (VFISX) - YTD return 4.71%, yield 4.40%, $3,000 minimum investment

(3) Black Rock Funds Low Duration Fund (CLDBX) - YTD return 4.12%, yield 4.46%, $5,000 minimum investment