Choice Mutual FundInvestment Picks

Marvin Appel

Here, I suggest some of the most attractive bond mutual funds that should be worthy of your trust.

The Gold Standard—SEC Yield

If your fund reports an SEC yield, that is the single most informative piece of data to describe the potential return from the fund if interest rates and credit ratings remain stable. The SEC yield is the yield to maturity less the fund’s expenses.

Here is an example of how important it is to get the correct yield when evaluating a bond fund. Suppose you were enticed by the performance of the Goldman Sachs Short Duration Government Fund (GSTGX) from 9/30/08 to 3/31/09, a period in which it returned more than most other short-term Treasury funds. If you wanted to look further ...