The US bond market is having a good year: The was up nearly 5% during the first quarter of 2025. “Unsettled by the , , and fears of ‘stagflation,’ investors took a risk-off approach to the markets during the quarter," Morningstar Indexes strategist .What’s next for bonds?“Morningstar’s US economics team projects that the Fed will continue to ease monetary policy throughout 2025 by lowering the federal-funds rate throughout the year, reaching a range of 3.25%-3.50% at the end of 2025,” reports Morningstar senior US market strategist . “We continue to think investors will be best served in longer-duration bonds and capturing the high yield carry along with potential future price appreciation, as our US economics team forecasts a multiyear period of declining yields.” Regardless of where interest rates and bond yields are headed, there’s a case to be made for holding bond funds in your portfolio. One of the biggest reasons to do so is that .Are Bond Funds a Good Investment?Investors rely on bonds for many reasons: funding , over the long term, or generating income to name a few. Before getting down to choosing a bond mutual fund or exchange-traded fund, step back and consider why you need one: What role will a bond fund play for you?Once you know the need it’s filling, figure out whether a is a better choice for you. If you’re investing via a tax-deferred account like an IRA or 401(k), a taxable-bond fund will be the better match. If you’re investing in a taxable account, a fund that buys municipal bonds might be the better choice on an aftertax basis. A good place to start your search for the best bond funds to buy—both taxable and municipal alike—is with the . Mutual funds and ETFs that earn our highest rating of Gold are those that we think are most likely to outperform over a full market cycle.The 66 Best Bond Funds to BuyThese ETFs and mutual funds all land in one of the bond Morningstar Categories and have at least one share class that earns our top as of April 1, 2025.American Funds Bond Fund of America American Funds Limited-Term Tax-Exempt Bond American Funds Mortgage American Funds Tax-Exempt Bond American Funds Tax-Exempt Fund of California American Funds Tax-Exempt Preservation Portfolio American Funds US Government Securities American High-Income Municipal Bond Artisan High Income Baird Aggregate Bond Baird Core Plus Bond Baird Short-Term Bond Baird Ultra-Short Bond Investor BlackRock High Yield Bond/iShares High Yield Active ETF BlackRock Strategic Global Bond BlackRock Strategic Income Opportunities BlackRock/iShares Total Return BrandywineGLOBAL Corporate Credit Fund BrandywineGLOBAL High Yield Fund Dodge & Cox Global Bond Dodge & Cox Income Fidelity Floating Rate High Income Fidelity Investment Grade Bond Fidelity Tax-Free Bond Fidelity Total Bond/ETF FPA Flexible Fixed Income Hartford Strategic Income/ETF iShares Core Total USD Bond Market ETF iShares Core US Aggregate Bond ETF iShares Short-Term TIPS Bond Index JP Morgan Income/ETF JPMorgan Limited Duration Bond ETF Loomis Sayles Core Plus Bond Muzinich Credit Opportunities PGIM High Yield PGIM Short Duration Multi-Sector Bond/ETF Pimco Diversified Income Pimco Enhanced Short Maturity Active ETF Pimco Enhanced Short Maturity Active ESG ETF Pimco Global Bond Opportunities (US-Hedged) Pimco GNMA and Government Securities Pimco Income Pimco International Bond Pimco Short Asset Investment Pimco Total Return Schwab Short-Term US Treasury ETF Schwab US Aggregate Bond ETF Schwab US TIPS ETF SPDR Portfolio Aggregate Bond ETF SPDR Portfolio Short-Term Treasury ETF State Street Aggregate Bond T. Rowe Price Floating Rate/ETF Vanguard California Intermediate-Term Tax-Exempt Vanguard California Long-Term Tax-Exempt Vanguard High-Yield Tax-Exempt Vanguard Intermediate-Term Corporate Bond Index/ETF Vanguard Intermediate-Term Tax-Exempt Vanguard Long-Term Corporate Bond Index/ETF Vanguard Long-Term Tax-Exempt Vanguard Limited-Term Tax-Exempt Vanguard Short-Term Corporate Bond Index/ETF Vanguard Short-Term Inflation-Protected Securities Index/ETF Vanguard Short-Term Treasury Index/ETF Vanguard Tax-Exempt Bond ETF Vanguard Total Bond Market Index/ETF Vanguard Ultra Short-term Tax-Exempt The list of the best bond funds covers a hodgepodge of investment styles. It includes bond funds focusing on fixed-income securities with different maturities and credit qualities and features both taxable-bond funds and municipal-bond funds. It encompasses the best bond index funds and the best actively managed options, too. Morningstar portfolio strategist suggests in her that investors stick with short- and intermediate-term bond funds as core holdings in their portfolios. Bond funds that focus exclusively on certain other types of securities—such as corporate bonds, international bonds, long-term bonds, high-yield bonds, and so on—should play more limited roles in a portfolio. can learn more about each of these bond funds by reviewing their .More of the Best ETFs to Buy What Is a Taxable-Bond Fund?Taxable-bond ETFs and mutual funds invest in fixed-income securities issued by governments and corporations. The “right” type of taxable-bond fund for you comes down to personal preferences. Will you forgo the incremental yield and diversification benefits that high-quality long-term bond funds typically offer for some protection against rising interest rates? Do you want to stick with the highest-quality bonds you can find, or are you willing to delve into lower-quality bonds in exchange for higher yields? Will you dabble in world bonds for yield pickup—and if yes, do you want currencies in the mix? Here are several broad types of taxable-bond funds to consider:Domestic Taxable-Bond Funds: ETFs and mutual funds that land in the long-term, intermediate-term, short-term, and ultrashort bond categories cluster here. These bond funds blend government bonds, asset-backed or mortgage-backed securities, investment-grade and high-yield debt, and a modest dose of international bonds. Although some funds are more income-oriented or more opportunistic than others, most provide decent exposure to a variety of bond types.Flexible-Bond Funds: Multisector and nontraditional bond ETFs and mutual funds land here. Like domestic taxable-bond funds, flexible-bond funds can invest across a mix of bond types. Unlike domestic taxable-bond funds, flexible-bond funds invest more aggressively in lower-quality bonds and/or international debt. Nontraditional bond funds, in particular, enjoy a high degree of interest-rate flexibility and may employ shorting. Simply put, these are the least constrained bond funds.Government-Bond Funds: The highest-quality taxable-bond mutual funds and ETFs reside in this group. To be included in one of the US government-bond categories, a fund must keep at least 90% of its assets tucked in government securities. Funds that invest strictly in Treasuries, strictly in MBS, or in some combination of the two populate the group. There are three government-focused categories included here, broken down by duration: short government, intermediate government, and long government.Corporate-Credit Funds: These ETFs and mutual funds favor bonds issued by corporations. Categories in this group include corporate-bond funds, high-yield bond funds, and bank-loan funds. Corporate-bond funds focus on bonds rated investment-grade; these funds, therefore, exhibit some degree of interest-rate sensitivity. High-yield bond funds target bonds rated as below-investment-grade; these funds invite more credit risk than interest-rate risk. Finally, bank-loan funds also invest in securities rated as below-investment-grade, and their interest payments are periodically reset. Because of their floating rates, bank loans theoretically have less sensitivity to interest-rate movements.World- and Emerging-Markets Bond Funds: The ETFs and mutual funds in this group favor fixed-income securities issued by governments and corporations outside of the US. That’s about the only thing they all have in common. World-bond funds must invest at minimum 40% of their assets in non-US debt, but some exclude US debt entirely, focus on corporates rather than governments, or hedge currencies—or don’t. Emerging-markets debt funds, meanwhile, keep at least 65% of their assets in developing-markets debt; but here, too, there are significant variations in currency strategies.Inflation-Protected Bond Funds: As the name suggests, inflation-protected bond ETFs and mutual funds seek to protect investors from rising inflation. As such, these funds invest in securities whose principal values adjust along with the rate of inflation.What Is a Municipal-Bond Fund?Municipal-bond ETFs and mutual funds invest in bonds that are issued by state and local governments to finance capital expenditures. Unlike taxable bonds, municipal bonds provide tax advantages that can be especially appealing to higher-income investors who are investing via taxable accounts. How? Municipal bonds are often exempt from federal taxes as well as state and local taxes. On the surface, municipal bonds appear to yield less than taxable bonds of similar quality and maturity—but that’s before taxes are taken into consideration. How can you determine whether municipal bonds are a good choice for you? Use a to see how a given municipal-bond ETF or mutual fund’s yield compares with the yield of a similar maturity and quality taxable-bond ETF or mutual fund, given your particular tax circumstances.More of the Best Funds The author or authors do not own shares in any securities mentioned in this article., The 66 Best Bond Funds to Buy. These ETFs and mutual funds all land in one of the bond Morningstar Categories and have at least one share class that earns our top Medalist Rating of Gold with 100% , Find the top rated Long-Term Bond mutual funds. Compare reviews and ratings on Financial mutual funds from Morningstar, S&P, and others to help find the best Financial mutual fund for you..