I skip the ultra short, because they pay so little that a taxable bank account (paying 1%) is clearly better.
In the short to short/intermediate range, I use VMLTX/VMLUX as my benchmark. It's toward the upper end of the range in duration (2.
5 years) and maturity (3.1) years. That (plus very low fees) gives it one of the higher SEC yields (0.94%) and one of the higher 1 year returns (1.0
5%). All while maintaining a AA average rating (many funds tend to be A or BBB).
Using those criteria (solid SEC yield, good 1 year return indicating some stability, and A or better credit), I'm finding few alternatives. What I do see are:
NEARX (SEC yield 0.79%
as of 9/30, 2.6 year duration, 2.7 year maturity, A rated)
FSTFX (SEC yield 0.8
5%
as of 11/30, 2.8 year duration, 3.2 year maturity, A rated)
BRMIX (new fund, 2.2 year duration, 2.7 year duration, per M*)
I'm curious about the latter - it's a new fund from a fine bond fund house (Baird). But it isn't using their usual managers. Rather, two of the three managers came over from BMO this year, where they'd been managing BASFX.
Like Baird funds in general, it is allowed to hold some junk (with this fund, 10%, including D rated bonds). But looking at its
holdings, most bonds are trading at a premium, or at worst a very slight discount, to par. That suggests that these are all high grade bonds, and the portfolio has little credit risk.
The managers seemed to do well with BASFX (which is itself another fund to look at - it's available load waived, but the risk is new management, which is one of the reasons for looking at BRMIX instead of BASFX).
At least there seem to be choices for good short term muni funds.
