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These Bond Funds Have Provided Effective Ballast

On the hunt for bond funds that have gained when the equity market has tumbled.

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Although the market turned around a bit on Tuesday, the past year has tried investors' patience. Investors in search of bright spots in their portfolios won't find many. Some of the traditional diversifiers for U.S. equities have fizzled, while others that have performed well don't yet appear in many investors' portfolios.

Precious-metals equities have surged recently, but they're still well in the red over the past year. Commodities' performance has been even more abysmal. Bear-market funds, which generally bet against stocks, have performed well--no surprise there. But they're volatile, and the fact that stocks trend up over long periods of time makes them a bad long-term bet. Managed-futures funds have performed well, as discussed here, but they're still a niche category; most investors don't own them at this point, and their often-high costs should give everyone pause.

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Christine Benz does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.