STATS: LOW-COST VS. HIGH-COST BOND FUNDS

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%

2