Russell Kinnell: It’s worth doing your research on bond funds.
Almost everyone needs a basic bond fund. If you’re a young investor, this is a handy diversification tool that will take some of the sting out of bear markets. If you’re retired, a core bond fund is a vital source of income that takes only modest risk to earn that return.
I’m going to share three great options to consider.
3 excellent core bond funds
These funds have received a gold rating from Morningstar analysts.
- Baird Global Bond (BAGIX)
- Dodge & Cox income (DODIX)
- Vanguard Tax Exempt Bond (VTEAX)
Baird Global Bond (BAGIX) is a gold listed fund led by Mary Ellen Stanek. Stanek and his team are doing a great job of taking a number of small bets that allow the fund to outperform without taking on too much risk. The fund has shown very consistent performance thanks to the skill of the manager and the low fees.
Dodge & Cox income (DODIX) is a Gold-rated fund in our core-plus category. Core-plus funds tend to take on more credit, sector and duration risk. In this case, the risk comes from the credit side. The fund leverages equity research to find good, high-quality corporate bonds, and it’s usually rewarded for taking those risks.
If you’re investing in a taxable account, you should consider a municipal bond fund so your income is tax-free. Vanguard Tax Exempt Bond (VTEAX) tracks a broad index with an emphasis on liquidity. It only charges 9 basis points, so almost all portfolio income goes directly to investors. We rate the Gold fund.
Look at 3 low volatility funds in the Russell Kinnel area.