A rising-rate environment poses challenges for income investors. After all, when interest rates rise, bond prices fall. At times like this, a seasoned bond-fund manager can be an income investor’s best friend.
At Kiplinger, we prefer mutual funds with solid long-term records – and managers with tenures to match. Also, we prefer funds with below-average volatility for their category, and we keep a close eye on a fund’s size because a gargantuan asset base makes managing a fund difficult.
And, of course, low operating costs are crucial for our funds – all actively managed – to overcome the biggest advantage of index funds: microscopic expense ratios.
When it comes to investing for income in choppy markets, these six bond funds – culled from the list of our favorite low-fee mutual funds – stand out.