4 Top-Performing Core-Plus Bond Funds

Amid a growing trade war and losses in the stock market, bonds have outpaced equities to start 2025. Core-plus bond funds have returned 2.58% in the year to date. To find the top-performing funds in this category over the long term, we looked for those with the best returns over the last one-, three-, and five-year periods. All names that passed the screen are actively managed.

• Invesco Core Plus Bond Fund CPBFX
• JPMorgan Core Plus Bond Fund JCPUX
• MFS Total Return Bond Fund MRBKX
• Nuveen Core Plus Bond Fund TIBFX

Intermediate Core-Plus Bond Funds Performance

Over the last 12 months, intermediate core-plus bond funds have returned 5.07%. On an annualized rate, these funds have returned 0.59% over the last three years and 0.24% over the last five. Meanwhile, the Morningstar US Core Bond Index has returned 4.45% over the last 12 months, gained 0.07% per year over the last three years, and lost 0.69% per year over the last five years.

What Are Intermediate Core-Plus Bond Funds?

Intermediate-term core-plus bond portfolios invest primarily in investment-grade US fixed-income issues, including government, corporate, and securitized debt. They generally have greater flexibility than core offerings to hold non-core sectors, such as corporate high yield, bank loan, emerging-market debt, and non-US currency exposures. Their durations (a measure of interest-rate sensitivity) typically range between 75% and 125% of the three-year average of the effective duration of the US Core Bond Index.

Screening for the Top-Performing Intermediate Core-Plus Bond Funds

To find the best funds in this category, we looked at returns from the past one-, three-, and five-year periods using data available in Morningstar Direct. We screened for open-ended and exchange-traded funds in the top 33% of the category using their lowest-cost primary share classes for those periods. We also filtered for funds with a Morningstar Medalist Rating of Bronze, Silver, or Gold. We excluded funds with assets under $100 million and analyst coverage that was not 100%. This left four names.

Because the screen was created with the lowest-cost share class for each fund, some may be listed with share classes that are not accessible to individual investors outside of retirement plans, or they may be aimed at institutional investors and require large minimum investments. The individual investor versions of those funds may carry higher fees, reducing returns to shareholders. In addition, Medalist Ratings may differ among the share classes of a fund.

Invesco Core Plus Bond Fund

• Morningstar Medalist Rating: Bronze
• Morningstar Rating: ★★★★

Over the past year, the $5.4 billion fund has gained 5.45%, while the average fund in its category is up 5.07%. The Invesco fund, launched in September 2012, has climbed 0.93% over the past three years and 0.55% over the past five.

“Four of Invesco’s fixed-income leaders, who average 27 years of industry experience, run the portfolio and adhere to a team-based approach. Head of global credit strategies Michael Hyman and head of North America investment-grade credit Matt Brill both joined the firm in 2013 from ING (now Voya). Shortly after, the firm added Hyman to the management roster alongside longtime manager Chuck Burge, who has helped steer the strategy since 2009. To create more depth, the firm added Brill in 2015 and named Todd Schomberg to the roster in 2020. Schomberg joined Invesco in 2016 after spending nearly a decade at Voya, where he worked alongside Hyman and Brill. The strategy remains in good hands with this group at the helm.”

—Tom Murphy, senior analyst

JPMorgan Core Plus Bond Fund

• Morningstar Medalist Rating: Silver
• Morningstar Rating: ★★★★

Over the past year, the $22.6 billion fund has gained 5.62%, while the average fund in its category is up 5.07%. The JPMorgan fund, launched in February 2005, has climbed 0.92% over the past three years and 0.39% over the past five.

“The strategy balances its intermediate core bond characteristics with measured risk-taking in off-benchmark stakes. Various types of securitized debt feature prominently, typically 35% to 50% of assets. These aren’t plain-vanilla pass-throughs; the team favors mortgage pools that meet its stringent standards that protect against prepayment risk and limit duration extension. High-yield credit is the largest non-investment-grade allocation, and the team adjusts these stakes to its outlook for risk. A cautious macro view has led the team to reduce high yield to about 10% of assets in mid-2024, about 3 percentage points less than two years ago, but recent economic optimism saw Treasuries fall to 24% of assets in June 2024, from 38% a year ago, in favor of investment-grade corporates and agency mortgage-backed securities.”

—Paul Olmsted, senior analyst

MFS Total Return Bond Fund

• Morningstar Medalist Rating: Silver
• Morningstar Rating: ★★★

Over the past year, the $8.3 billion MFS Total Return Bond Fund rose 5.41%, while the average fund in its category rose 5.07%. The MFS fund, which launched in May 2006, has climbed 0.90% over the past three years and gained 0.38% over the past five years.

“The strategy draws the best ideas from MFS' experienced fixed-income team and aims to outperform the Bloomberg U.S. Aggregate Bond Index over a market cycle. The managers develop a macro-outlook based on the firm’s frequent investment forums and committees, and this outlook drives the portfolio’s sector allocations. At the same time, traditional fundamental analysis drives security selection and feeds into those forums and committees. The strategy typically holds more corporate debt and securitized fare compared with its benchmark and a lower allocation to US Treasuries. Duration is kept within one year of that of its Bloomberg US Aggregate Bond Index benchmark. From January 2010 through July 2023, the annualized return of the US vehicle’s I share class stayed comfortably ahead of its Bloomberg US Aggregate Bond index benchmark but trailed roughly 40% of the peer group. This is not unexpected, as this strategy has historically taken on relatively limited credit risk compared with its peers in the intermediate core-plus bond Morningstar Category. The managers’ thoughtful, disciplined approach and experienced analyst team here support our positive view of the strategy.”

—Elbie Louw, senior analyst

Nuveen Core Plus Bond Fund

• Morningstar Medalist Rating: Silver
• Morningstar Rating: ★★★★

Over the past year, the $4.6 billion Nuveen Core Plus Bond Fund rose 5.39%, while the average fund in its category rose 5.07%. The Nuveen fund, launched in March 2006, has climbed 1.15% over the past three years and 0.60% over the past five.

“Higgins and team execute a relative value-focused process that incorporates a broad opportunity set, with the bulk of assets in investment-grade securities and a smaller subset in higher-risk “plus” sectors like high-yield bonds, bank loans, and emerging-markets debt that will typically amount to 10%-30% of portfolio assets depending on Higgins’ outlook and allocation decisions. This ‘plus’ exposure has declined over 2022 amid the backdrop of uncertainty and looming recession.”

—Chiayi Tsui, analyst