Use this screen to find intermediate-term and multisector-bond funds for investors who are wary of high-yield funds.
The high-yield bond market's recent rally has been hard to ignore--the typical fund in this category has returned 22.5% for the year to date through June 18, 2009. That said, the category as a whole was down 26.4% in 2008, and factors including climbing default rates and potentially lower recovery rates for bankruptcies mean that the likelihood for continued volatility is high, and another high-yield sell-off is entirely possible if the economy continues to flounder.
Investors not ready to add a pure high-yield offering to their portfolios would be better served by sticking with an intermediate-term or multisector-bond fund. While these funds might offer some exposure to high-yield issues, they also offer more diversification in terms of credit quality and sector allocations.
Creating a screen for topnotch funds in these categories is a snap with Principia or Morningstar Advisor Workstation.
Special Criteria = Distinct Portfolios Only
And ( Morningstar Category = Interm-Term Bond
Or Morningstar Category = Multisector Bond )
And Purchase Constraints = Closed-New Investment
Simply screen for intermediate-term and multisector-bond funds that are open to new investment.
And% Rank Cat. 10 Yr <= 33
And Manager Tenure (Longest) >= 10.0
We limited the results to funds that ranked in the top third of their categories over the past 10-year period, making sure that the current management teams were responsible for the outperformance.
And Min Init Purchase <= 25000