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Find Seaworthy Core Bond Funds Here

These funds pulled off an impressive feat in 2008 and 2009.

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While the volatility of fixed-income funds normally doesn't reach that of the typical equity fund over long periods of time, it's been a relatively wild ride in the bond markets through the October 2007-March 2009 equity bear market and the subsequent rally. During the bear market, particularly starting in the latter half of 2008, investors fled most debt securities with even a hint of risk--and the credit-rating agencies turned out to be too lenient at times in rating bonds. But when optimism returned in early 2009, risk quickly came back in vogue and high-yield and mid-grade corporate bonds soared. This turbulent period could be seen as a proving ground for bond managers' strategies. A fund that managed to navigate this environment with aplomb, and sported many of the other fundamental traits investors should look for, ought to make an excellent core fixed-income holding.

To look for solid core bond funds, we fired up the  Morningstar Premium Fund Screener on The screener was set to search for the distinct portfolios of intermediate-term bond funds that require a minimum initial investment of $10,000 or less and are covered by Morningstar's fund analysts. We also wanted managers with at least five years at the helm, expense ratios of 0.8% or less (this was a relatively stringent criterion, but it seems appropriate in a bond market with paltry yields), and funds that landed in the top half of the category both in 2008 and 2009 and had outperformed at least two thirds of their category peers over the trailing five years through Jan. 15, 2010.

The screen returned four funds as of Jan. 18, 2010. (Results may be different when the screen is run on other dates.) Click here to run the screen yourself.

Greg Carlson does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.