Morningstar’s Guide to Fixed-Income Investing
Bond strategies and picks as the Federal Reserve raises interest rates.
For the first time in a long while, bond investors find themselves in a new world: a world of rising interest rates. In an effort to tame inflation, the Federal Reserve has been raising rates in 2022.
Not surprisingly, bonds and bond funds have taken it on the chin this year. In fact, this year has shaped up to be the worst year on record for bond funds.
Is it time to abandon bonds, given the direction of interest rates and their ugly performance this year?
Many portfolio specialists would say no. “Fixed-income securities still play a critical role in reducing portfolio risk and can also prove surprisingly resilient, even during periods of rising interest rates,” notes Morningstar portfolio strategist Amy Arnott.
In fact, some would argue that bond yields are attractive today and that bonds may be a good investment these days.
How should investors be thinking about their fixed-income investments as interest rates rise? This special report provides research to help answer that question.
Bonds, Rising Interest Rates, and Your Portfolio
By history’s standards, stocks have not performed too badly, but bonds certainly have.
Why Bonds Should Still Play a Role in Your Portfolio
Even during periods of rising interest rates, they can still help control risk.
In a time of rising interest rates and inflation, here’s what you need to know about what buying bonds can do for your portfolio.
Why Municipal-Bond Funds Are Worth a Look
Higher taxable-equivalent yields add to their appeal.
What Bond Fund Investors Get Wrong
They flee opportunities rather than seize them.
Are Bonds a Better Bet Than Stocks Right Now?
Morningstar Investment Management’s Marta Norton lays out the changing calculus for investing across the markets.
The Best Bond Funds and ETFs
These exchange-traded funds and mutual funds earn Morningstar’s top rating.
The fixed-income-focused exchange-traded funds on this list all earn Morningstar Analyst Ratings of Gold.
The Best Short-Term Bond Funds
These ETFs and mutual funds invest in different types of short-term bonds and earn Morningstar Analyst Ratings of Gold.
Bond Ladder ETFs Can Help Investors Climb Higher
Putting money in ETFs with staggered maturities can preserve and even grow wealth in a rising interest-rate environment.
4 Short-Term Bond Funds That Have Stood the Test of Time
Explore what makes these funds unique.
12 Top-Performing Bond Funds With High Yields
With bond yields at their best levels in years, a look at what some Morningstar Medalist funds have to offer investors.
What Makes Market-Value-Weighting Work for Bond Investing?
Alternative weighting methods deliver different risk/return profiles.
Watch: 3 Great Core Bond ETFs
These low-cost ETFs provide investors with broad exposure to the fixed-income market.
Watch: 3 Great Core Bond Funds to Take the Sting Out of a Bear Market
It’s worth the time to do your research on bond funds.
Watch: 3 Short-Term Bond Funds to Calm Interest-Rate Jitters
These funds will limit your risk—and your returns.
More About Bonds
The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.