Our Picks

9 of Our Favorite Core Plus Bond Funds

Karen Wallace

Bond funds are one of the predictably boring parts of many people's portfolio. And that's a good thing. As my colleague Christine Benz pointed out in a recent article examining asset class correlation data, high-quality bonds have been one of the most effective and reliable diversifiers for equity risk in a portfolio. That means that when your stock funds are losing money, your high-quality bond funds are likely holding up well. 

But some investors prefer to be a little more daring with their bond allocation. Core plus fixed-income strategies invest in typical "safe haven" core bond fare, such as intermediate-term Treasury securities and high-quality corporates and mortgages. But core-plus strategies can take on a little more credit risk and/or interest-rate risk than more conservative peers. Core-plus strategies can also invest in more income-oriented or opportunistic fare such as nonagency MBS, lower-quality corporate bonds, or emerging-markets debt, which come with greater return potential but also court greater risk. 

Karen Wallace does not own shares in any of the securities mentioned above. Find out about Morningstar's editorial policies.