3 Top-Rated Bond Funds Beyond Vanguard and Fidelity

Investors are flocking to bond funds this year. That’s understandable: Higher bond yields plus stock market volatility have driven interest in fixed-income securities. Among bond-fund categories, intermediate core-plus bond funds have been especially popular. The mutual funds and exchange-traded funds in this category invest primarily in investment-grade US fixed-income issues, including government, corporate, and securitized debt, and typically dabble in corporate high-yield bonds, bank loans, emerging-market debt, and non-US currency exposures, too.

Looking for a good bond fund to buy from that category? The biggest one-stop-shop fund groups—Vanguard, BlackRock/iShares, Fidelity, and Capital Group among them—all offer highly rated mutual funds and ETFs focusing on intermediate-term bonds. But here we’re shining the spotlight on a few well-run funds in the intermediate core-plus bond category that are not managed by one of the industry’s biggest fund families. The top ETFs and mutual funds on our shortlist earn Morningstar’s highest

3 Top-Rated Bond Funds Beyond Vanguard and Fidelity

1. Baird Core Plus Bond BCOSX
2. Dodge & Cox Income DODIX
3. Pimco Active Bond ETF BOND

The ETFs and mutual funds on this list earn Morningstar’s highest Medalist Rating, which means we think they’ll outperform over a full market cycle. They’re all also actively managed.

Here’s a bit about each of these top-rated bond funds from Morningstar’s analysts.

Baird Core Plus Bond BCOSX

Strong execution and a process whose incremental advantages add up make Baird Core Plus Bond a top choice in the intermediate core-plus bond Morningstar Category.

Baird’s 10-person taxable bond management team may not be flashy, but its members excel as a group. Four senior leaders, including co-CIOs Warren Pierson and Jay Schwister, provide a mix of macroeconomic and investment guidance. The other six managers and their respective analyst benches focus on bond-picking and building the portfolio. Jeffrey Schrom, Andrew O’Connell, and Abhishek Pulakanti are corporate credit experts, Meghan Dean and Patrick Brown specialize in mortgage- and asset-backed securities, while M. Sharon deGuzman monitors portfolio construction and risk metrics.

The team concentrates on finding reliable sources of excess return. Since Baird believes interest rate calls are not one of them, the team matches the Bloomberg US Universal Index’s overall interest rate sensitivity, or duration, and then allocates to the bond sectors with the most attractive combination of underlying fundamentals, valuations, and liquidity. The result is a portfolio that tends to traffic heavily in corporate bonds relative to its index and most peers, especially with BBB ratings, while also consistently finding value in securitized bonds, including higher-quality nonagency residential and commercial MBS.

Discipline and simplicity are hallmarks of the approach. For example, rather than using derivatives to replicate the benchmark’s duration, the team analyzes the impact of each trade and chooses specific Treasuries and mortgage exposures to keep the overall portfolio’s interest rate sensitivity in line with the benchmark’s. Similarly, the team does not use index-level credit default swaps but sticks to cash bonds that offer attractive yields relative to their risk and dials exposure up when credit spreads widen and down when they tighten. Amid tight spreads at year-end 2025, the portfolio’s 2.6% below-investment-grade stake, distributed across almost 100 issuers, was one of the category’s lowest.

Thanks to its modest fee hurdle and effective style, outperformance has been consistent. Over the past two decades through January 2026, the fund’s rolling five-year returns have beaten the benchmark in every single period and exceeded the peer median (based on each fund’s cheapest share class) in more than 94% of them.

Read Morningstar’s full report on Baird Core Plus Bond.

Dodge & Cox Income DODIX

Dodge & Cox Income’s adept investment team and robust investment approach make it tough to beat.

This strategy’s success owes to the investment acumen of its eight managers, who average more than two decades of experience. Dana Emery, CEO, chair of the firm’s board, and a member of this fund’s investment committee, will retire at the end of 2025 after more than four decades at Dodge & Cox. Her departure has been prepared for by an orderly handoff of duties, including the promotion of global bond specialist José Ursua as a portfolio manager here earlier in 2025. This change is the second retirement in two years, but the investment committee’s depth and abundance of talent mean it can handle the adjustments.

The fund’s patient and at times contrarian approach to investing isn’t changing. Historically, its managers have often favored corporates, noting that the yield advantage these securities offer is an important contributor to total returns over time. But this approach remains anchored on valuations, which has led to large adjustments to its corporate credit stake over time. For instance, the team was quick to ramp up corporate credit exposure during the first-quarter 2020 selloff and did the same amid 2022’s rocky first half. But it saw fewer opportunities for taking credit market risk recently and reduced the portfolio’s corporate bond allocation to 30% of assets as of June 2025, at the low end of its historical range. At the same time, it increased its Treasuries allocation to 15% of assets and securitized debt, primarily agency mortgage-backed securities, to 50%; these are typically used as dry powder, so their weighting in the portfolio is inversely correlated to corporate valuations. And while this portfolio had been historically lighter on interest rate risk than its benchmark, its managers have gradually increased duration in recent months (to 6.3 years versus 6.1 for the Bloomberg US Aggregate Bond Index as of mid-2025), in keeping with the portfolio’s conservative tilt.

While the strategy’s current makeup is uncharacteristically defensive, the tilt toward corporates has often made it more sensitive than most peers to credit market swings, as did its longtime shorter duration stance. However, the team has demonstrated strong security-selection skills, and its knack for exploiting market corrections has served investors well: The I share class’ 3.1% 10-year annualized gain through August 2025 topped 89% of distinct peers.

The strategy’s growth in assets under management over the past two years is notable. While we don’t believe capacity issues are imminent, we are keeping a close eye on its girth to make sure it stays as nimble as it has been in the past.

Read Morningstar’s full report on Dodge & Cox Income.

Pimco Active Bond ETF BOND

Pimco Active Bond ETF is a bit less complicated, a bit more income-focused, and backed by Pimco’s vast resources.

Pimco manages this offering with a focus on generating a stable, higher-income payout than a standard marketlike portfolio. It’s run with the same resources as sibling Pimco Total Return but is less benchmark- and more income-oriented than that strategy. It also does not take on the level of risk inherent in more aggressive offerings such as Pimco Income. That can mean favoring more use of income-producing securities, less trading, and lighter use of tools that don’t generate distributable income.

Those decisions are made by managers David Braun, Daniel Hyman, and Jerome Schneider, who take cues for this offering from a group of managers led by Mohit Mittal that’s responsible for all of the firm’s Total Return-style portfolios. When combined with Pimco’s other 300-plus portfolio managers and analysts, they’re as capable or better than any team in the industry.

Despite its income focus and the freedom to hold much more exposure to lower-quality debt, the portfolio has averaged less than 7% of the latter over the three years ending June 2025. It also treads lightly in non-US-dollar bonds and currencies, the latter of which typically don’t generate periodic income. As with other less-benchmark-centric Pimco funds, this one’s interest rate sensitivity, as measured by duration, ranges between 2.0 and 8.0 years; until its managers extended duration beyond 6.3 years in late 2024, it had mostly kept that metric at or below the peers’ norm and broad market average in recent years.

The strategy’s profile is relatively muted compared with the overall intermediate-term core-plus Morningstar Category, which has likely played a role in its middling total returns relative to others in that category for the standard trailing periods, despite generating above-average income returns. But while its otherwise modest below investment-grade exposure marginally keeps the fund out of the intermediate-term core category, its record is excellent versus that group.

Read Morningstar’s full report on Pimco Active Bond ETF.

How to Screen for More Top Bond Funds

Investors can use the Morningstar Investor Screener to create a larger list of core plus bond ETFs and mutual funds to investigate further. Here’s how to get started and possible filters to use.

Access the prebuilt screen. Visit Morningstar’s Core Plus Bond Funds list. Click on the blue “Screen with Investor” button. The full list of all core plus bond funds and ETFs will populate in the screener. From there, you can filter on other metrics that matter to you.

Medalist Rating (Overall): You can choose to filter the list by Medalist Rating, focusing on mutual funds and ETFs with our highest ratings of Gold, Silver, and Bronze.

Share Class Type: The core plus bond funds list includes both mutual funds and ETFs. If you want to narrow the list to ETFs only, click on the Share Class Type drop-down box and select ETF. Or if you want to include mutual funds only, select mutual funds in the drop-down box.

Passive or Active Strategies Only: The core plus bond funds list includes ETFs and funds practicing both active and passive strategies. If you want to focus only on passive strategies or active strategies, not both, click on the blue “Screen with Investor” button. In the pop-up box, select Basics, then Index Fund. Back in the left-hand navigation, choose either “Yes” or “No” in the Index Fund drop-down box, depending on whether you want to filter only on passive funds or only on active funds.

Using the “+ Filter” button, you can continue to further filter your list by expenses, branding name (think of that as an asset manager), and other factors.