Fears of rising rates have driven large flows to the category, but investors must take care to not eliminate the 'insurance' that core fixed-income funds offer.
During his keynote presentation at the Morningstar Investment Conference, the PIMCO manager made the case that high debt levels and a need for financial stability mean that central banks should keep real rates close to zero for some time.
The big names in this category have more to prove before we can fully recommend them, says Morningstar's Eric Jacobson.
May was the worst month in over a year for flows to U.S. equities, while many core bond funds are receiving inflows as rising-rate concerns abate.
As credit spreads have tightened on a nearly continuous trend over the past year, they are becoming richly valued relative to their historical average.
The rate at which yields rise with maturities can be a key issue for bond investors.
Morningstar readers name their favorite core bond funds, TIPS, and allocation vehicles for the middle portion of their portfolios.
Readers share where they're holding money they expect to spend within the next year or two.
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