The Best Bond Funds

The US bond market has already had a whipsawed 2026. The Morningstar US Core Bond Index was up 1.86% at the end of February, down 0.62% at the end of March, and is now up 0.76% for the year to date through April 15, 2026.

“During the first quarter, inflation fears dominated, sending yields higher and prices lower,” says Morningstar editor-at-large Leslie P. Norton. “The yield on the US Treasury 10-year note finished the quarter at 4.3%, up from 4.2% at the start of the year.”

“The worst performers were long-term core bonds, followed by high-yield bonds, as worries about the impact of artificial intelligence and the Iran war made investors risk-averse. That said, credit-sensitive portions of the bond market have been resilient, even with the amount of uncertainty hitting the financial markets,” adds Norton.

Are Bond Funds a Good Investment?

Investors rely on bonds for many reasons: funding short-term goals, diversifying a stock-heavy portfolio over the long term, or generating income during retirement, to name a few. Before getting down to choosing a bond mutual fund or exchange-traded fund, step back and consider why you need one: What role will a bond fund play for you?

Once you know the need it’s filling, figure out whether a taxable-bond fund or municipal-bond fund is a better choice for you. If you’re investing via a tax-deferred account like an IRA or 401(k), a taxable-bond fund will be the better match. If you’re investing in a taxable account, a fund that buys municipal bonds might be the better choice on an aftertax basis.

A good place to start your search for the best bond funds to buy—both taxable and municipal alike—is with the

. Mutual funds and ETFs that earn our highest rating of Gold are those that we think are most likely to outperform over a full market cycle.

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The Best Bond Funds to Buy

These ETFs and mutual funds all land in one of the bond Morningstar Categories and have at least one share class that earns our top Medalist Rating of Gold with 100% analyst coverage as of April 15, 2026.

1. American Funds Bond Fund of America BFFAX
2. American Funds Limited Term Tx-Ex FLTEX
3. American Funds Mortgage AFFMX
4. American Funds Tax Exempt Bond TFEBX
5. American Funds Tax-Exempt Fund of CA EXCAX
6. American Funds Tax-Exempt Presv Port TYEFX
7. American Funds US Government Sec USGFX
8. American High-Income Municipal Bond HIMFX
9. Artisan High Income Institutional APHFX
10. Baird Aggregate Bond BAGIX
11. Baird Core Plus Bond BCOIX
12. Baird Short-Term Bond BSBIX
13. Baird Ultra Short Bond BUBIX
14. BlackRock High Yield BRHYX
15. BlackRock Strategic Global Bond MAWIX
16. BlackRock Strategic Income Opps BSIIX
17. BlackRock/iShares Total Return MPHQX BRTR
18. Dodge & Cox Global Bond DOXLX
19. Dodge & Cox Income DOXIX
20. Fidelity Advisor Investment Gr Bd FIKQX FIGB
21. Fidelity Advisor Total Bond FBKWX FBND
22. Fidelity Tax-Free Bond FTABX
23. FPA Flexible Fixed Income FPFIX
24. Hartford Strategic Income/ETF HSNFX HFSI
25. iShares Core US Aggregate Bond ETF AGG
26. JP Morgan Core Plus Bond/ETF HLIPX JCPB
27. JP Morgan Income/ETF JMSIX JPIE
28. JPMorgan Limited Duration Bond ETF JPLD
29. Loomis Sayles Core Plus Bond NERNX
30. MFS Income MFIIX
31. Muzinich Dynamic Income Supra MZCSX
32. Neuberger Berman Emerging Markets Debt Hard Currency ETF NEMD
33. PGIM High Yield PHYZX
34. PGIM Short Duration Multi-Sector Bond/ETF SDMZX PSDM
35. Pimco Diversified Income PDIIX
36. Pimco Emerging Markets Bond PEBNX
37. Pimco Emerging Mkts Lcl Ccy and Bd PELBX
38. Pimco Enhanced Short Maturity Active ETF MINT
39. Pimco Enhanced Short Maturity Active ESG ETF EMNT
40. Pimco Global Bond Opportunities (US-Hedged) PGBIX
41. Pimco GNMA and Government Securities PDMIX
42. Pimco Income PIMIX
43. Pimco International Bond PFUIX PFORX
44. Pimco Low Duration Instl PTLDX
45. Pimco Short Asset Investment PAIDX
46. Pimco Total Return Instl PTTRX
47. Schwab Short-Term US Treasury ETF SCHO
48. Schwab US Aggregate Bond ETF SCHZ
49. Schwab US TIPS ETF SCHP
50. State Street Aggregate Bond SSAFX
51. SPDR Portfolio Aggregate Bond ETF SPAB
52. SPDR Portfolio Short-Term Treasury ETF SPTS
53. T. Rowe Price Floating Rate/ETF TFAIX TFLR
54. TCW MetWest Total Return Bond MWTSX
55. Vanguard California Long-Term Tax-Exempt VCLAX
56. Vanguard High-Yield Tax-Exempt VWALX
57. Vanguard Interm-Term Corp Bd/ETF VICBX VCIT
58. Vanguard Intermediate-Term Tax-Exempt VWIUX
59. Vanguard Long-Term Tax-Exempt VWLUX
60. Vanguard Limited-Term Tax-Exempt VMLUX
61. Vanguard Short-Term Corp Bd Idx/ETF VSTBX VCSH
62. Vanguard Short-Term Inflation-Protected Securities Index/ETF VTAPX VTIP
63. Vanguard Short-Term Treasury/ETF VSBIX VGSH
64. Vanguard Tax-Exempt Bond ETF VTEB
65. Vanguard Total Bond Market/ETF VTBSX BND
66. Vanguard Ultra Short-term Tax-Exempt VWSUX

The list of the best bond funds covers a hodgepodge of investment styles. It includes bond funds focusing on fixed-income securities with different maturities and credit qualities and features both taxable-bond funds and municipal-bond funds. It encompasses the best bond index funds and the best actively managed options, too. Morningstar portfolio strategist Amy Arnott suggests in her Role in Portfolio framework that investors stick with short- and intermediate-term bond funds as core holdings in their portfolios. Bond funds that focus exclusively on certain other types of securities—such as corporate bonds, international bonds, long-term bonds, high-yield bonds, and so on—should play more limited roles in a portfolio.

Morningstar Investor members can learn more about each of these bond funds by reviewing their Analyst Reports.

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What Is a Taxable-Bond Fund?

Taxable-bond ETFs and mutual funds invest in fixed-income securities issued by governments and corporations.

The “right” type of taxable-bond fund for you comes down to personal preferences. Will you forgo the incremental yield and diversification benefits that high-quality long-term bond funds typically offer for some protection against rising interest rates? Do you want to stick with the highest-quality bonds you can find, or are you willing to delve into lower-quality bonds in exchange for higher yields? Will you dabble in world bonds for yield pickup—and if yes, do you want currencies in the mix?

Here are several broad types of taxable-bond funds to consider:

Domestic Taxable-Bond Funds: ETFs and mutual funds that land in the long-term, intermediate-term, short-term, and ultrashort bond categories cluster here. These bond funds blend government bonds, asset-backed or mortgage-backed securities, investment-grade and high-yield debt, and a modest dose of international bonds. Although some funds are more income-oriented or more opportunistic than others, most provide decent exposure to a variety of bond types.

Flexible-Bond Funds: Multisector and nontraditional bond ETFs and mutual funds land here. Like domestic taxable-bond funds, flexible-bond funds can invest across a mix of bond types. Unlike domestic taxable-bond funds, flexible-bond funds invest more aggressively in lower-quality bonds and/or international debt. Nontraditional bond funds, in particular, enjoy a high degree of interest rate flexibility and may employ shorting. Simply put, these are the least constrained bond funds.

Government-Bond Funds: The highest-quality taxable-bond mutual funds and ETFs reside in this group. To be included in one of the US government-bond categories, a fund must keep at least 90% of its assets tucked in government securities. Funds that invest strictly in Treasuries, strictly in MBS, or in some combination of the two populate the group. There are three government-focused categories included here, broken down by duration: short government, intermediate government, and long government.

Corporate-Credit Funds: These ETFs and mutual funds favor bonds issued by corporations. Categories in this group include corporate-bond funds, high-yield bond funds, and bank-loan funds. Corporate-bond funds focus on bonds rated investment-grade; these funds, therefore, exhibit some degree of interest rate sensitivity. High-yield bond funds target bonds rated as below-investment-grade; these funds invite more credit risk than interest rate risk. Finally, bank-loan funds also invest in securities rated as below-investment-grade, and their interest payments are periodically reset. Because of their floating rates, bank loans theoretically have less sensitivity to interest rate movements.

World- and Emerging-Market Bond Funds: The ETFs and mutual funds in this group favor fixed-income securities issued by governments and corporations outside of the US. That’s about the only thing they all have in common. World-bond funds must invest at a minimum of 40% of their assets in non-US debt, but some exclude US debt entirely, focus on corporates rather than governments, or hedge currencies—or don’t. Emerging-markets debt funds, meanwhile, keep at least 65% of their assets in developing-market debt, but here, too, there are significant variations in currency strategies.

Inflation-Protected Bond Funds: As the name suggests, inflation-protected bond ETFs and mutual funds seek to protect investors from rising inflation. As such, these funds invest in securities whose principal values adjust along with the rate of inflation.

What Is a Municipal-Bond Fund?

Municipal-bond ETFs and mutual funds invest in bonds that are issued by state and local governments to finance capital expenditures. Unlike taxable bonds, municipal bonds provide tax advantages that can be especially appealing to higher-income investors who are investing via taxable accounts. How? Municipal bonds are often exempt from federal taxes as well as state and local taxes.

On the surface, municipal bonds appear to yield less than taxable bonds of similar quality and maturity—but that’s before taxes are taken into consideration. How can you determine whether municipal bonds are a good choice for you? Use a tax-equivalent yield calculator to see how a given municipal-bond ETF or mutual fund’s yield compares with the yield of a similar maturity and quality taxable-bond ETF or mutual fund, given your particular tax circumstances.