Top 5 Highest Yielding International Bond Mutual Funds - Highest Yielding Zacks #1 Ranked Funds

Investors have gradually begun to recognize the opportunity that the international bond market has come to represent. Though the U.S. bond market continues to attract investors, it has featured infrequently among the best performing international markets. Today international markets represent more than half of the world's fixed income investment opportunities. With their widely diversified holdings, mutual funds offer the most secure route for those looking to invest in the international bond market.

Below we will share with you the 5 highest yielding Zacks #1 ranked international bond mutual funds. Each has earned a Zacks #1 Rank (Strong Buy) as we expect these mutual funds to outperform their peers in the future. To view the Zacks Rank and past performance of all international bond funds, then click here.

PIMCO Emerging Local Bond (PEBLX) invests a large proportion of its assets in fixed-income securities denominated in currencies of emerging markets. The fund may also invest in options, futures and swap instruments. It may also invest in securities with economic linkages to emerging market countries. The international bond mutual fund returned 18.63% in the last one year period.

As of December 2010, this international bond mutual fund held 256 issues, with 11.28% of its total assets invested in Pimco Fds Private Account Portfolio Ser.

GMO International Bond III (GMIBX) seeks to outperform its benchmark, the J.P. Morgan Non-U.S. Government Bond index. The majority of the fund's assets are utilized to invest in bonds, either directly or through other GMO funds or derivatives. The international bond mutual fund has a ten year annualized return of 7.53%.

The international bond mutual fund has an expense ratio of 0.38% compared to a category average of 1.13%.

Dreyfus International Bond A (DIBAX) invests at least 65% of its assets in foreign securities not denominated in U.S. dollars. Not more than 25% of its assets are utilized to purchase emerging markets securities; and a maximum of 5% may be invested in a single emerging market country. The international bond mutual fund returned 15.53% in the last one year period.

David Leduc is the fund manager and has managed this international bond mutual fund since 2006.

Columbia Emerging Markets Bond A (REBAX) seeks total return. The fund invests the majority of its assets in emerging market securities with generate fixed income. The fund may also consider for investment companies which derive a significant portion of their revenues from emerging markets. The international bond mutual fund has a three year annualized return of 11.37%.

The international bond mutual fund has a minimum initial investment of $2,000 and an expense ratio of 1.31% compared to a category average of 1.30%.

PIMCO Developing Local Markets A (PLMAX) invests a large proportion of its assets in fixed-income securities denominated in currencies of emerging markets or these currencies themselves. Not more than 15% of the fund's assets may be utilized to purchase high-yield securities. The international bond mutual fund returned 15.19% in the last one year period.

Michael Gomez is the fund manager and has managed this international bond mutual fund since 2005.

To view the Zacks Rank and past performance of all international bond mutual funds, then click here.

About Zacks Mutual Fund Rank

By applying the Zacks Rank to mutual funds, investors can find funds that not only outpaced the market in the past but are also expected to outperform going forward. Learn more about the Zacks Mutual Fund Rank at http://www.zacks.com/funds/mutualfunds/