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Fund Spy

Making Sense of an Increasingly Tight Market for Bonds

Where Morningstar Medalists are finding value.

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The first seven months of the year have been moderately generous to investors in intermediate-term bond funds. The Bloomberg Barclays U.S. Aggregate Bond Index returned a solid 2.3% from Jan. 1 through July 31, close to its gain for all of 2016.

Meanwhile, many funds that take a more adventurous approach to risk than the investment-grade index posted even better returns, thanks to gains in emerging-markets debt--peso-denominated Mexican debt was a particular standout--and junk bonds.

Sarah Bush has a position in the following securities mentioned above: PTTRX. Find out about Morningstar’s editorial policies.