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Fund Spy

What's in Non-Traditional-Bond Fund Portfolios?

Non-traditional-bond funds have swapped interest-rate risk for other risks.

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Almost five years ago, we launched our non-traditional-bond Morningstar Category to create a more useful classification for the deluge of new bond funds following the global financial crisis. These funds gave active bond managers a wide degree of latitude to invest across global fixed-income sectors. Many of these funds promised investors an attractive absolute return stream uncorrelated to traditional markets, but they are most often positioned as substitutes to traditional core-bond funds that are designed to protect investors from the looming risk of rising rates.

Eric Jacobson does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.