American Century Ginnie Mae InvBGNMX

Morningstar Rating

Fund Research and Analysis

by Ryan Leggio

American Century GNMA is a keeper, but investors should be aware of a limitation.

This fund's long-term record is noteworthy: above-average returns coupled with a below-average Morningstar Risk rating, meaning the trio in charge has done well protecting on the downside. Read more

Kudos

Relatively low expenses.

Modest month-to-month price volatility relative to other intermediate-government and mortgage-focused funds.

Strong long-term performance. Read more

Risks

Its mortgage focus means this fund is susceptible to prepayment risk. Read more

Strategy

This fund holds only Ginnie Mae bonds that carry the full backing of Uncle Sam. The fund's duration (a measure of interest-rate sensitivity) will typically stay within six months of the Salomon Brothers GNMA Index. Read more

Management

Alejandro H. Aguilar and Dan Shiffman took over here in September 2004 (from prior manager Casey Colton), but they still work with one of this group's veterans, comanager Bob Gahagan. Aguilar and Shiffman previously worked at the California pension system known as CalPERS and have several years of experience in the industry. Read more

Inside Scoop

This fund makes only modest interest-rate bets and rotates among the various subsectors of the mortgage market, with a heavy emphasis on those guaranteed by Ginnie Mae, an instrument of the U. Read more

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