money in a short-term bond fund and gradually move it into stocks,” says Van Pelt. “In the meantime, the money in the bond fund will earn a higher yield than it would in a money market fund. Even if interest rates fall some more, dropping your yield, you stand to benefit from price appreciation because the bonds in the fund will gain value.”
Just be sure to look closely at any fund before signing a deposit slip. “These funds are not homogeneous,” says Morningstar’s Berry. “Some hold government obligations while others hold corporate paper; some ultra-short funds keep maturities under one year while some short-term funds go out three years or longer.” The lower the credit quality of the paper and the longer the maturity, the higher the yield, but also the greater the risk if a fund’s manager comes up short in trying to foresee the future.
TOP SHORT-TERM GOVERNMENT FUNDS
| Fund Name (Ticker) |
Year-to-Date |
1-Year Ann. |
3-Year Ann. |
5-Year Ann. |
Toll-Free |
Minimum |
| American Cent Inf-Adj Inv (ACITX) |
6.33% |
13.58% |
7.33% |
– |
800-345-2021 |
$2,500 |
| Managers Interm Dur Gov (MGIDX) |
3.23 |
13.08 |
5.85 |
7.11 |
800-835-3879 |
2,000 |
| Accessor Mortgage Sec Adv (AMSFX) |
3.22 |
12.98 |
6.30 |
7.56 |
800-882-9612 |
5,000 |
| Eaton Vance Govt Oblig A (EVGOX) |
4.00 |
12.09 |
5.87 |
6.42 |
800-225-6265 |
1,000 |
| Asset Mgmt Interm Mort Secs (ASCPX) |
3.15 |
11.99 |
6.33 |
7.11 |
800-527-3713 |
10,000 |
*Return through May 31, 2001Source: Morningstar Inc.
TOP SHORT-TERM BOND FUNDS
| Fund Name (Ticker) |
Year-to-Date |
1-Year Ann. |
3-Year Ann. |
5-Year Ann. |
Toll-Free |
Minimum |
| PIMCO Real Return Bond A (PRTNX) |
7.32% |
15.23% |
9.67 |
– |
888-877-4626 |
$2,500 |
| PIMCO Total Return Mtg D (PTMDX) |
3.87 |
14.21 |
7.05 |
– |
800-225-8570 |
2,500 |
| Advantus Mortgage Secs Inc A (ADMSX) |
4.08 |
14.14 |
7.11 |
8.11 |
800-665-6005 |
250 |
| Deutsche Short-Interm Inc A (FLINX) |
3.52 |
12.30 |
6.04 |
6.66 |
800-730-1313 |
2,000 |
| Harris Ins Sh/Int Bond N (HIMBX) |
GN=”CENTER”>3.54 |
12.29 |
5.95 |
6.54 |
800-982-8782 |
1,000 |
*Return through May 31, 2001Source: Morningstar Inc.
