Essentially all of GOVT’s holdings are rated AAA and about 70% of its holdings have maturities ranging from one to seven years.
“This fund offers good downside protection and can serve as a portfolio ballast during market turmoil,” said Morningstar. “When markets go through a period of stress, Treasuries attract demand because of their perceived safety. This strategy launched in February 2012, but its index posted a cumulative gain of 13.4 percentage points from November 2007 through February 2009, while the S&P 500 lost 50.9 percentage points. But when the S&P 500 rebounded between March and December 2009, this fund’s index lost 0.1 percentage points.”
Morningstar has a Bronze rating on GOVT.
For more on fixed income strategies, visit our Fixed Income Channel.