100 best money moves
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Moves 85-87: Buy smart bond funds
You're right to worry that interest rates may be going up -- which would send the price of bonds down. But you may be able to lessen the pain by stashing part of your bond allocation in these three funds.
85. Loomis Sayles Bond
Expense ratio: 0.93%
Three-year return: 8.4%
This fund, which invests in the U.S. and abroad, has built an outstanding long-term record with big bets on out-of-favor sectors.
86. T. Rowe Price High-Yield Bond
Expense ratio: 0.76%
Three-year return: 11.7%
High-yield bonds tend to do well as the economy strengthens; that's when interest rates typically start heading north.
87. Vanguard Short-Term Bond
Expense ratio: 0.22%
Three-year return: 3.7%
Short-term funds are least sensitive to rising rates. This low-cost choice is likely to lose just 2.5% if rates rise one percentage point.
NEXT: Moves 88-91: Benefit from emerging markets
Last updated April 28 2011: 11:32 AM ET
Source: Morningstar
Annualized returns as of April 1.
Annualized returns as of April 1.
