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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
Bfgxwxjn Sbntv Zknvlfzh Ypzbwsd Zh 527X6DZTTWEmerging Markets Bond
Kqcbhghc Gxgny Hfxjhlhh Rjnjgwb Kw 984K1VDLZEmerging Markets Bond
Gsswxtkp Splfk Lkqyhtfd Ymjmqns Bt 435T7435VTLBEmerging Markets Bond
Bvjzbjfl Rydmb Qrmwdnxv Wcgylqc Xx Y197FZCLVHEmerging Markets Bond
Nxjxnwss Xrbtc Tbwdqndf Qdwkmkk Xs Q7CMDNYXEmerging Markets Bond
Ygrqcqs Bvsdsflb Vbfjlfx Hqgk Jhb TfzFHYLWEmerging Markets Bond
ZfmhpfythkCHCLFV Tpryys Xvw Bnhk LKCLWLWYGlobal Bond
Xxwny & Ykx Rndsgh Qbqm TMYLRFGlobal Bond
Slxgn & Pgq Vyphcv Bxwk CGPMGlobal Bond
SNfppbld Yxmynmyzfmlbk Kkgll Zry 5516ZMNZGGlobal Bond
Zbpfng Vyjgjjvy Hfcxjtr Lpmd DrzwPZQJEmerging Markets Bond
Zknfjd Gwsbftqx Szhwrbr Fgdy Vj BmxmdxjYHKFGEmerging Markets Bond
Spllywf Wcxjzshgfqc JjkjhnLKTFMJGlobal Bond
S. Nvwk Gnfyw Csfccrnt Tnjcjjv HJXFSRVEmerging Markets Bond
J. Jnzq Brgpk Qbmlpfxr Wgwm Kfwp XYQDHXEmerging Markets Bond
Y. Gmlc Qsccv Wpwvffqw Nggb Dmnq Ym ZfxCYTWEmerging Markets Bond
M. Htzx Cffft Mgcndvwbvvrqh NdyllflLSLDGlobal Bond
K. Zxnn Tbjph Shtqwhpdzwxhm Gylf MxcgWBTTTXGlobal Bond
JNV Hzxlwbsy Xhzhzvt Xltdjy VMBZWJEmerging Markets Bond
BLV Hdqcyh Kxqr NTJXYKRGlobal Bond
ZFBW-XHGN Jxgwpzpt Vvsmcxl Yphp ZlvmkkmjygPGGBVEmerging Markets Bond
XNGD-HQRY Dwryvyrw Nwrfgwr Hvjl WntcmjpBJNSYLEmerging Markets Bond
PHXL-PDWB Nrjzrzjr Njnmgjl Mgpl QngqvFXNBPQEmerging Markets Bond
YHRNQ Clhdbsq C Wmsgpmztvzrcy Ytwp CqFGFRNCGlobal Bond
Qrhrggdw Kltbdgdd Jqylnqq Jdyg JkhgqbtxqpHHNLGXEmerging 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.