NEW YORK ( TheStreet) -- The Barclays Aggregate bond index has been a tough bogy for managers to beat. During the past decade the index returned 5.7% annually, and only about a quarter of actively managed intermediate-term funds topped the benchmark. Many of the winning managers succeeded by taking on more risk. The funds held sizable stakes in high-yield bonds, which are rated below-investment grade. Since the financial crisis, high-yield bonds have rallied sharply and boosted fund returns.But some intermediate funds have topped the benchmark without holding big high-yield positions. Focusing on high-quality securities, the funds have succeeded by spotting undervalued bonds. The high-quality funds could make sound core holdings for cautious investors. Solid performers include Artio Total Return Bond (BJBGX), Touchstone Total Return Bond (TCPAX), and Wells Fargo Advantage Total Return Bond (MNTRX).
Funds That Win With High-Quality Bonds
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