Top 5 International Bond Mutual Funds - Best of 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 5 top rated international bond mutual funds. Each has earned a Zacks #1 Rank (Strong Buy) as we expect the fund to outperform its peers in the future. To view the Zacks Rank and past performance of all international bond funds, then click here.

Loomis Sayles International Bond A (LSIAX) seeks high total return. The fund concentrates on acquiring fixed-income instruments. At least 65% of the fund's assets are utilized to purchase international bonds. It focuses on acquiring investment grade bonds and not more than 35% of its assets may be invested in junk bonds. The international bond mutual fund returned 15.39% in the last one year period.

The international bond mutual fund has a minimum initial investment of $2,500 and an expense ratio of 1.10% compared to a category average of 1.13%.

JPMorgan Emerging Markets Debt (JEMDX) invests the majority of its assets in debt securities issued in emerging markets. These securities may be dollar-denominated or may be issued in foreign currencies. The fund is non-diversified and may also purchase securities rated below investment grade. The international bond mutual fund has a ten year annualized return of 11.14%.

Pierre-Yves Bareau is the fund manager and has managed this international bond mutual fund since 2009.

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 returned 15.39% in the last one year period.

The international bond mutual fund has an expense ratio of 0.39% compared to a category average of 1.13%.

Columbia Emerging Markets Bond A (REBAX) 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. Not more than 25% of its assets are utilized to purchase securities issued by a particular government. The international bond mutual fund has a three year annualized return of 13.1%.

As of July 2011, this international bond mutual fund held 117 issues, with 4.65% of its total assets invested in Columbia Short-Term Cash.

Federated International High Income A (IHIAX) seeks current income. The fund invests in emerging market debt securities with different maturity periods. It may purchase a significant amount of securities rated below investment grade and invest in derivatives. The international bond mutual fund has a five year annualized return of 9.6%.

The Fund Manager is Roberto Sanchez-Dahl and he has managed this international bond mutual fund since 2001.

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.