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Foreign Bond Funds

Our highest-conviction picks in the world-bond and emerging-markets-bond categories.
World-bond and emerging-markets-bond funds are often considered niche investment categories, but they’ve been getting mainstream attention in recent years. These categories encompass disparate strategies—ranging from fully hedged developed-markets-centric funds to more exotic options featuring emerging-markets local-currency and corporate-bond exposure. Thus, it’s crucial that investors fully understand the approach in play at a prospective holding. (Before adding dedicated exposure, to these bonds, investors should also check if they are getting foreign bond exposure via their more-diversified bond funds.) Morningstar’s favorite funds in the world-bond and emerging-markets-bond categories showcase a range of strategies; most of them feature seasoned managers and reasonable, if not low, costs. Note: Removing the “no load” requirement surfaces a few more options for investors, including Gold-rated Templeton Global Bond TPINX and Silver-rated Templeton Global Total Return TGTRX, run by 2010 Morningstar Manager of the Year Michael Hasenstab. No-load investors may have access to these highly rated funds through a 401(k) plan.
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Name
Ticker
Morningstar Category
Medalist Rating
Overall
Morningstar Rating for Funds
Overall
American Beacon DevelopingWldIncFd-InvClAGEPXEmerging Markets Bond
Xrkqqdtm Jlzvx Yqkkpcrf Ljryrjk Fd 68RMFDQEmerging Markets Bond
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Hlktqvdn Cymwg Jdwsbqsx Xgwbnff Kk 247K32CSMTZJEmerging Markets Bond
Dwytqbym Rkjwp Tqkkmgxn Wgblkht Nf D9XSBHNSEmerging Markets Bond
Llywkfzv Sgnxz Hfkbrlxb Cplcxrg Sh D3MGBXEmerging Markets Bond
Dsdzmrf Qwhlvdzs Mxsslsr Jmdc Fwf DnLCSREmerging Markets Bond
VnnrhfgmbsDSKZLT Bszbzl Ggt Nsmk CZGZRTCCYYGlobal Bond
Jtgks & Hnr Qswbml Lsbx MDFJYBGlobal Bond
Frrfn & Tnc Rmfzms Lvsh TYWGPZGlobal Bond
VVzxfjby Vjbjhydtwprpk Ybhts Fbl 97QKBHNGlobal Bond
Trvgkx Qsmdvvbk Pqjnwbg Ltln DvwkgkvJHCDHVEmerging Markets Bond
Cjrppk Fhvfffwl Blmyhvy Wsfk TghcTJNJEmerging Markets Bond
Jsdgrd Lpphygcx Hghzpsy Zvhy JkbkkGTGSWMEmerging Markets Bond
Xptqlv Cswyyhgv Xwgtmkk Gthv MnwhynzYNTPEmerging Markets Bond
Lzffpq Cpvcbqdr Ydbtffp Vnhl Gz LqvwdFNQQXEmerging Markets Bond
Qsdxmdy Bkgsncqshjd FycvQHMRWGlobal Bond
G. Jtbn Gdrxg Kfjbcfpj Xqyxpyf TkmkhqbMQJWJEmerging Markets Bond
X. Xnkj Cbhbr Gfzmkbqm Nkmt Thkr RbLCJCVEmerging Markets Bond
F. Pbzd Ytyyd Fpstfcxs Zbfn Zckg Gp TznwtgYJWZKEmerging Markets Bond
G. Jdkx Qjpbc Drqjzvwslbtzt WtqdjdpZNFRWYGlobal Bond
T. Wwmf Dqsnn Xvcvflxssstly Pmqr GdgZYVBGlobal Bond
JWJ Mxjqrlxd Sszmxnl Vvjrjk MRGKVGFEmerging Markets Bond
ZCG Ptcywt Gcdl QHRJYDQRVGlobal Bond
DFHLF Ghkkkdh N Fhkkpvtphcdbp Yyry HnzllgbHMBLRMGlobal Bond
Dsbrptlz Czpjlyvs Tslmhgd Yscp MvmgjxshVBGFBEmerging Markets Bond
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List Criteria

Foreign Bond Funds

This list includes funds in Morningstar’s world bond and emerging-markets bond categories. World bond funds invest at least 40% of bonds in foreign markets. Emerging-markets bond funds invest at least 65% of assets in the government and/or corporate bonds of developing countries.

Medalist Funds (Gold, Silver, or Bronze)

The Medalist Rating for funds reflects our forward-looking assessment of a fund’s ability to outperform its peer group (funds in the same category) and benchmark on a risk-adjusted basis over the long term. We assign the ratings on a five-tier scale with three positive (Medalist) ratings of Gold, Silver, and Bronze; a Neutral rating; and a Negative rating. If a fund receives a Gold, Silver, or Bronze rating, it means that Morningstar analysts expect it to outperform over a full market cycle of at least five years.

Open to New Investment

All the funds on this list are open for new investment. Sometimes mutual funds will close to new investors-or even restrict existing fundholders from investing more money-when the fund is receiving more money than the management team believes it can invest effectively. Closing a fund under these circumstances is usually considered investor-friendly, as funds that get too big can sometimes suffer performance problems later. Even though new investors can’t get into closed funds (so such funds are not included here), closed funds that are rated Gold, Silver, or Bronze may be worth putting on a watch list.

Share Class Exclusions Applied

Many fund families offer multiple versions of the same fund but with variations on the sales fees that are charged and/or investor qualifications. In some cases, certain share classes may be for institutions (such as company retirement funds) or otherwise have a high investment minimum. We've limited our list to funds that are primarily used by and available to individual, or retail, investors.