Morningstar’s Guide to Fixed-Income Investing
Bond strategies and picks as the Federal Reserve raises interest rates.
For the first time in a long while, bond investors find themselves in a new world: a world of rising interest rates. In an effort to tame inflation, the Federal Reserve has been raising rates in 2022.
Not surprisingly, bonds and bond funds have taken it on the chin this year. In fact, this year has shaped up to be the worst year on record for bond funds.
Is it time to abandon bonds, given the direction of interest rates and their ugly performance this year?
Many portfolio specialists would say no. “Fixed-income securities still play a critical role in reducing portfolio risk and can also prove surprisingly resilient, even during periods of rising interest rates,” notes Morningstar portfolio strategist Amy Arnott.
In fact, some would argue that bond yields are attractive today and that bonds may be a good investment these days.
How should investors be thinking about their fixed-income investments as interest rates rise? This special report provides research to help answer that question.
By history’s standards, stocks have not performed too badly, but bonds certainly have.
Even during periods of rising interest rates, they can still help control risk.
In a time of rising interest rates and inflation, here’s what you need to know about what buying bonds can do for your portfolio.
Higher taxable-equivalent yields add to their appeal.
They flee opportunities rather than seize them.
Morningstar Investment Management’s Marta Norton lays out the changing calculus for investing across the markets.
These exchange-traded funds and mutual funds earn Morningstar’s top rating.
The fixed-income-focused exchange-traded funds on this list all earn Morningstar Analyst Ratings of Gold.
These ETFs and mutual funds invest in different types of short-term bonds and earn Morningstar Analyst Ratings of Gold.
Putting money in ETFs with staggered maturities can preserve and even grow wealth in a rising interest-rate environment.
Explore what makes these funds unique.
With bond yields at their best levels in years, a look at what some Morningstar Medalist funds have to offer investors.
Alternative weighting methods deliver different risk/return profiles.
Watch: 3 Great Core Bond ETFs
These low-cost ETFs provide investors with broad exposure to the fixed-income market.
It’s worth the time to do your research on bond funds.
These funds will limit your risk—and your returns.