3 Diversified Bond Mutual Funds for Balanced Investing

Investing in diversified bond funds is preferred to individual bond investing, as building a portfolio of the second type may prove relatively more expensive. A higher level of liquidity also makes diversified bond funds more attractive.

Moreover, mutual funds having significant exposure to diversified bonds are excellent choices for investors seeking steady returns with a relatively low level of risk. Investing in funds that maintain a portfolio of bonds issued across a wide range of market sectors also reduces sector-specific risk.

Below, we share with you three top-ranked diversified bond mutual funds, namely DWS Short Duration DBPIX, Goldman Sachs Dynamic Bond GSOPX and iShares U.S. Intermediate Credit Bond Index Fund BICBX. 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.

DWS Short Duration invests in fixed income securities rated within the top four credit rating categories by a nationally recognized statistical rating organization. It may invest in securities of diverse maturities. The fund has returned 5.6% over the past three years.

Bryan Dziuban has been one of the fund managers of DBPIX since 2024.

Goldman Sachs Dynamic Bond typically invests most of its net assets and borrowings in a diversified mix of U.S. and international investment-grade and high-yield bonds, along with other fixed-income securities. The fund has returned 8.2% over the past three years.

As of September 2025, GSOPX had 46.9% of its assets invested in Total Misc Bonds.

iShares U.S. Intermediate Credit Bond Index Fund invests nearly all its assets in index bonds, tracking a market-weighted benchmark of investment-grade, dollar-denominated, fixed-rate, taxable corporate and government-related bonds with intermediate maturities. The fund has returned 5.6% over the past three years.

BICBX has an expense ratio of 0.12%.

To view the Zacks Rank and the past performance of all diversified bond mutual funds, investors can click here to see the complete list of diversified bond mutual funds.

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This article originally published on Zacks Investment Research (zacks.com).

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