June 2007
Top-yielding short-term bond funds
Here are the highest-yielding short-term bond funds after excluding funds with sales charges, expenses over 0.8 percent, and
portfolios that have a large portion of bonds with low credit ratings. If you're putting your money in these funds for only
a couple of years, you don't need to give away a good portion of your gains to the fund managers. And you'll want to minimize
the risk that comes with higher-yielding bonds with low credit ratings. If you have a discount brokerage account--one where
you can buy and sell exchange-traded funds for less than $15 a trade--you might also want to consider the iShares Lehman 1-3
Year Credit Bond fund, a short-term ETF with a 5.1 percent yield and 0.2 percent annual expense ratio.
| Fund name (ticker) | Yield  |
Expense ratio | Most recent 12-month total return | % of portfolio with AAA credit rating | Minimum investment |
|---|---|---|---|---|---|
| Government Street Bond (GVSBX) | 6.5% | 0.71 | 5.3% | 56% | $5,000 |
| USAA Short-Term Bond (USSBX) | 5.3 | 0.69 | 5.4 | 46 | 3,000 |
| Vanguard Short-Term Investment-Grade (VFSTX) | 5.1 | 0.21 | 5.9 | 65 | 3,000 |
| TIAA-CREF Short-Term Bond (TCSTX) | 5.0 | 0.30 | 5.8 | 68 | 2,500 |
| Lehman Brothers Short Duration Bd. Inv. (LBSDX) | 4.9 | 0.70 | 5.2 | 73 | 2,000 |
| Vanguard Short-Term Bond Index (VBISX) | 4.9 | 0.18 | 5.3 | 91 | 3,000 |
| Fidelity Short-Term Bond (FSHBX) | 4.9 | 0.45 | 5.1 | 59 | 2,500 |
| Vanguard Short-Term Federal (VSGBX) | 4.9 | 0.20 | 5.4 | 100 | 3,000 |
| State Farm Interim (SFITX) | 4.8 | 0.19 | 6.7 | 100 | 250 |
30-day yield as of March 30, 2007. Data: Morningstar.
