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3 Core Bond Funds for the Long Haul

Bonds provide an appealing return for much less risk than stocks.

3 Great Core Bond Funds for 2024
Securities In This Article
T. Rowe Price Tax-Free Income Inv
PGIM Total Return Bond A
Fidelity Intermediate Bond

Russel Kinnel: Core bond funds are incredibly useful. Skilled managers build a diversified portfolio that you couldn’t build on your own because of the high dollar values needed to trade bonds. Also, they and their trading desk get much better prices than individuals could get. Core bond funds make good long-term holdings for just about any investor because they provide an appealing return for much less risk than stocks. To be sure, the returns aren’t equal to stock returns but just about the time you think you should go all in on equities is often the time that equities lose money.

Here are three good choices that are widely available in fund supermarkets without a front-end fee.

3 Core Bond Funds for the Long Haul

  1. PGIM Total Return Bond PDBAX
  2. Fidelity Intermediate Bond FTHRX
  3. T. Rowe Price Tax-Free Income PRTAX

Gold-rated PGIM Total Return Bond benefits from a deep team. It takes on a little more interest-rate risk and a little more credit risk than peers, but it makes good use of that to produce appealing returns and yield. So, this is on the risky end of core but still a core bond fund.

On the lower-risk end, you’ll find Fidelity Intermediate Bond, which takes on less interest-rate and credit risk than most. That gives the fund a defensive profile that limits losses when interest rates spike or the economy hits a recession. The fund favors corporate credit over mortgages and other asset-backed securities, but it largely sticks to higher-quality corporate bonds.

Finally, in taxable accounts, a muni fund is a good idea. I like Silver-rated T. Rowe Price Tax-Free Income. The fund employs a research-intensive process to find attractive bonds. It generally avoids big macro calls and has delivered solid returns over time. Dino Mallas recently handed the reins over to Tim Taylor, a veteran investor with 25 years of experience.

Watch 3 Great Value Funds for 2024 for more from Russel Kinnel.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

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About the Author

Russel Kinnel

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Russel Kinnel is director of ratings, manager research, for Morningstar Research Services LLC, a wholly owned subsidiary of Morningstar, Inc. He heads the North American Medalist Rating Committee, which vets the Morningstar Medalist Rating™ for funds. He is the editor of Morningstar FundInvestor, a monthly newsletter, and has published a number of prominent studies of the fund industry covering subjects such as manager investment, expenses, and investor returns.

Since joining Morningstar in 1994, Kinnel has analyzed virtually every type of fund and has covered the most prominent fund families, including Fidelity, T. Rowe Price, and Vanguard. He has led studies on the predictive power of fund data and helped develop the Morningstar Rating for funds and the Morningstar Style Box methodology. He was co-author of the company's first book, Morningstar Guide to Mutual Funds: 5-Star Strategies for Success (Wiley, 2003), and was author of the book Fund Spy: Morningstar's Inside Secrets to Selecting Mutual Funds That Outperform, published in 2009.

Kinnel holds a bachelor's degree in economics and journalism from the University of Wisconsin.

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