STATS: LOW-COST VS. HIGH-COST BOND FUNDS
Corporate junk lowest cost Expense 1 Year Rank FUND Ratio Return 1 Dreyfus High Yield…
Corporate junk
lowest cost
Expense 1 Year
Rank FUND Ratio Return
1 Dreyfus High Yield Securities 0.02 16.68%
2 Vanguard Fixed Income High Yield 0.29 11.91%
3 MAS High Yield Inst’l 0.50 15.98%
4 Merrill Lynch Corp High Income A 0.51 11.46%
5 Nicholas Income Fund 0.55 13.13%
6 Delaware Pooled Trust High Yield 0.59 18.14%
7 Franklin AGE High Income Adv 0.60 12.21%
8 Prudential High Yield A 0.65 12.82%
9 MAS High Yield Inv 0.69 15.73%
10 RBB BEA High Yield Portfolio Inst’l 0.70 14.85%
highest cost
Expense 1 Year
Rank FUND Ratio Return
1 Principal High Yield R 2.46 8.56%
2 Davis High Income B 2.30 9.31%
3 SunAmerica High Income B 2.14 13.26%
4 Principal High Yield B 2.09 8.89%
5 Morgan Stanley High Yield B 2.00 12.15%
6 Morgan Stanley High Yield C 2.00 12.77%
7 Evergreen High Yield Bond B 2.00 12.96%
8 Evergreen Diversified Bond B 1.98 11.11%
9 Oppenheimer Champion Income B 1.97 11.05%
10 Colonial High Yield Securities C 1.96 13.11%
AVERAGE 1.31 12.81%
Dreyfus High Yield had infinitesimal expenses and a yield almost twice as high as Principal’s, the most costly.
Corporate Investment Grade
lowest cost
Expense 1 Year
Rank FUND Ratio Return
1 Dreyfus Bond Market Index Basic 0.15 9.42
2 Vanguard Short-Term Corporate 0.25 6.86%
3 Vanguard Intermediate-Term Corporate 0.25 8.93%
4 Vanguard Long-Term Corporate 0.28 13.79%
5 Dreyfus Bond Market Index 0.40 9.22%
6 Ariel Premier Bond Inst 0.45 9.10%
7 J.P. Morgan Inst’l Bond 0.50 9.29%
8 Fidelity Spartan Short-Term 0.50 6.54%
9 UAM ICM Fixed Income Inst’l 0.50 8.81%
10 Merrill Lynch Corporate Invstment Grade A 0.57 8.34%
highest cost
Expense 1 Year
Rank FUND Ratio Return
1 Merri
ll Lynch ABP Quality C 4.15 8.30%
2 Merrill Lynch ABP Quality B 4.08 8.39%
3 Merrill Lynch ABP Quality D 3.47 9.06%
4 Merrill Lynch ABP Quality A 3.23 9.33%
5 Alliance Bond Corporate C 1.90 11.08%
6 Alliance Bond Corporate B 1.90 11.08%
7 Kemper Income & Capital Preservation B 1.90 7.62%
8 Kemper Income & Capital Preservation C 1.86 7.77%
9 Pacific Horizon Corporate K 1.64 9.44%
10 IDS Selective Fund B 1.64 7.48%
AVERAGE 1.26 9.19%
Vanguard Long-Term was the clear leader in return, with expenses almost a full percentage point below average.
Multi-sector bond
lowest cost
Expense 1 Year
Rank FUND Ratio Return
1 Franklin Strategic Income 0.25 10.03%
2 Excelsior Inst’l Bond Index 0.30 8.98%
3 Portico Bond IMMDEX Inst’l 0.42 9.43%
4 Hotchkis & Wiley Short-Term Invest 0.48 6.18%
5 Excelsior Inst’l Income 0.50 8.73%
6 Delaware Pooled Trust Int’l Fixed Income 0.53 6.67%
7 Prudential Diversified Bond Z 0.57 8.00%
8 Northeast Investors Trust 0.64 13.89%
9 Hotchkis & Wiley Total Return 0.65 10.77%
10 Berwyn Income Fund 0.66 13.38%
highest cost
Expense 1 Year
Rank FUND Ratio Return
1 PaineWebber Strategic Income B 2.58 9.48%
2 PaineWebber Strategic Income C 2.33 9.89%
3 ESC Strategic Income D 2.15 3.41%
4 SunAmerica Diversified Income B 2.04 9.45%
5 Putnam Diversified Income II B 2.00 7.98%
6 Kemper Diversified Income B 1.95 7.84%
7 Colonial Strategic Income B 1.93 7.80%
8 Putnam Income Fund B 1.92 7.52%
9 Colonial Income Fund B 1.85 7.86%
10 Kemper Diversified Income C 1.84 8.08%
AVERAGE 1.25 9.24%
Only three of the 10 most expensive funds here beat the average return, but half of the least expensive 10 did.
Municipal junk
lowest cost
Expense 1 Year
Rank FUND Ratio R
eturn
1 Vanguard High Yield 0.19 9.24%
2 Delaware-Voyageur Minnesota High Yield A 0.30 11.10%
3 Franklin California High Yield Tax-Free I 0.35 11.71%
4 Prudential High Yield Z 0.43 10.60%
5 Merrill Lynch National A 0.56 9.35%
6 Franklin High Yield Tax-Free Income I 0.61 10.61%
7 Eaton Vance High Yield A 0.62 13.89%
8 Prudential High Yield A 0.63 10.49%
9 Value Line Tax Exempt High Yield 0.63 8.78%
10 Strong High Yield 0.66 13.89%
highest cost
Expense 1 Year
Rank FUND Ratio Return
1 Davis Tax-Free High Income B 1.98 6.95%
2 PaineWebber High Income B 1.96 9.92%
3 MFS Municipal High Income B 1.86 7.85%
4 Colonial High Yield B 1.84 9.17%
5 John Hancock High Yield Tax-Free B 1.81 8.81%
6 IDS High Yield Tax Exempt B 1.45 8.45%
7 Putnam Tax-Free Income High-Yield B 1.50 8.25%
8 Delaware Group Nat’l High Yield B 1.59 9.44%
9 PaineWebber High Income C 1.70 10.20%
10 Seligman Series California High Yield D 1.78 7.75%
AVERAGE 1.08 9.77%
Eaton Vance and Strong tied for top return among the top 10, but there is a difference of four basis points in expense ratios.
Municipal Single-State
lowest cost
Expense 1 Year
Rank FUND Ratio Return
1 Franklin Arkansas 0.10 10.09%
2 Franklin Washington D 0.10 9.63%
3 MFS Pennsylvania A 0.10 10.07%
4 Oklahoma Municipal 0.11 8.02%
5 Delaware-Voyageur TF California A 0.20 12.30%
6 Armada Ohio Tax Exempt Inst 0.24 7.24%
7 Armada Ohio Tax Exempt Ret 0.25 7.35%
8 Aquila Narragansett Ins T/F Inc A 0.26 8.07%
9 Aquila Narragansett Ins T/F Inc Y 0.26 9.76%
10 Nuveen-Flagship Alabama R 0.27 11.53%
highest cost
Expense 1 Year
Rank FUND Ratio Return
1 Merrill Lynch Michigan Ltd Maturity B 3.86 4.48%
2 Merrill Lynch Mich
igan Ltd Maturity C 3.81 4.45%
3 Merrill Lynch Michigan Ltd Maturity A 3.50 4.86%
4 Merrill Lynch Michigan Ltd Maturity D 3.48 4.75%
5 Merrill Lynch Massachusets Ltd Maturity B 2.84 4.09%
6 Merrill Lynch Arkansas B 2.44 7.41%
7 Merrill Lynch Arkansas C 2.51 7.21%
8 Merrill Lynch Massachusets Ltd Maturity A 2.52 4.47%
9 Merrill Lynch Massachusets Ltd Maturity D 2.62 4.36%
10 Merrill Lynch Massachusets Ltd Maturity C 2.69 4.40%
AVERAGE 1.15 8.37%
Expenses of the top four funds were about as close as a miser’s fist; none of the bottom 10 beat the return average.
U.S. Government Short & Intermediate
lowest cost
Expense 1 Year
Rank FUND Ratio Return
1 Vanguard Admiral Short Term UST 0.15 6.49%
2 Vanguard Admiral Intermed UST 0.15 9.02%
3 Vanguard Fixed Short Term Federal 0.25 6.46%
4 Pacific Horizon Short-Term Gov’t A 0.25 5.72%
5 Vanguard Short-Term Treasury 0.25 6.39%
6 Vanguard Intermediate-Term Treasury 0.25 8.96%
7 Kiewit Short-Term Gov’t 0.30 6.28%
8 Benchmark US Gov’t Securities A 0.36 6.76%
9 GE Short-Term Gov’t D 0.45 6.32%
10 Schwab Short-Term Bond Index 0.49 6.88%
highest cost
Expense 1 Year
Rank FUND Ratio Return
1 BlackRock Gov’t Income Tr ust C 4.05 5.30%
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