Mutual fund disclosure is a hot topic these days, and U.S. government bond funds are among the latest to attract the scrutiny of the Securities and Exchange Commission.

To avoid misleading investors, any mutual fund "whose name implies a policy of investing in U.S. Government securities" should provide more prominent and explicit disclosure of their investments in debt issued by Freddie Mac, Fannie Mae, and the FHLBs, the SEC wrote in an Oct. 17 letter to the Investment Company Institute.

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