NEW YORK ( TheStreet) -- Worried about the uncertain economic outlook, investors have been dumping emerging market bonds and racing to buy Treasuries. During the past three months, emerging market bond funds have lost 3.4%, while long government funds have gained 19.8%, according to Morningstar.But not all emerging bond funds have suffered equally. During the past three months, Fidelity New Markets Income (FNMIX) about broke even. The fund avoided trouble by following the cautious approach favored by portfolio manager John Carlson. The Fidelity manager shuns the lowest-quality bonds and emphasizes government securities that are issued in dollars -- not in foreign currencies. The dollar bonds often prove resilient in downturns. "Our first rule is to play good defense and avoid blowups," says Carlson.
Finding Jewels in Emerging Markets Bond Funds
Check Out Our Best Services for Investors
Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts
David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
Every recommendation goes through 3 layers of intense scrutinyquantitative, fundamental and technical analysisto maximize profit potential and minimize risk.
More than 30 investing pros with skin in the game give you actionable insight and investment ideas.