Nontraditional Bond

The Nontraditional Bond category contains funds that pursue strategies divergent in one or more ways from conventional practice in the broader bond-fund universe. Many funds in this group describe themselves as "absolute return" portfolios, which seek to avoid losses and produce returns uncorrelated with the overall bond market; they employ a variety of methods to achieve those aims. Another large subset are self-described "unconstrained" portfolios that have more flexibility to invest tactically across a wide swath of individual sectors, including high-yield and foreign debt, and typically with very large allocations. Funds in the latter group typically have broad freedom to manage interest-rate sensitivity, but attempt to tactically manage those exposures in order to minimize volatility. The category is also home to a subset of portfolios that attempt to minimize volatility by maintaining short or ultra-short duration portfolios, but explicitly court significant credit and foreign bond market risk in order to generate high returns. Funds within this category often will use credit default swaps and other fixed income derivatives to a significant level within their portfolios. Morningstar®

Bandon Isolated Alpha Fixed Income Fund (BANAX)

Performance (1-yr.): 3.61% Expenses: 2.24%
Performance (1-mo.): 0.20% Total Assets: $39.12M
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BlackRock Allocation Target Shares Series P (BATPX)

Performance (1-yr.): Expenses: 0.00%
Performance (1-mo.): 1.50% Total Assets: $9.17M
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BlackRock Global Long/Short Credit Fund (BGCAX)

Performance (1-yr.): 6.94% Expenses: 1.51%
Performance (1-mo.): 0.97% Total Assets: $1.02B
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BlackRock Strategic Income Opportunities Portfolio (BASIX)

Performance (1-yr.): 7.94% Expenses: 0.96%
Performance (1-mo.): 1.27% Total Assets: $5.34B
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BTS Diversified Income Fund (BDIAX)

Performance (1-yr.): Expenses: 1.97%
Performance (1-mo.): 2.09% Total Assets: $205,754
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Columbia Absolute Ret Emg Mkts Mcr Fund (CMMAX)

Performance (1-yr.): 3.82% Expenses: 1.49%
Performance (1-mo.): 0.77% Total Assets: $114.59M
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Compass EMP Long/Short Fixed Income Fund (CBHAX)

Performance (1-yr.): Expenses: 1.16%
Performance (1-mo.): 0.50% Total Assets: $21.89M
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Delaware Diversified Floating Rate Fund (DDFAX)

Performance (1-yr.): 3.99% Expenses: 1.05%
Performance (1-mo.): 0.31% Total Assets: $275.93M
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Driehaus Select Credit Fund (DRSLX)

Performance (1-yr.): 3.90% Expenses: 1.23%
Performance (1-mo.): 0.60% Total Assets: $479.55M
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Eaton Vance Global Macro Absolute Return Advantage Fund (EGRAX)

Performance (1-yr.): 5.27% Expenses: 1.55%
Performance (1-mo.): 0.10% Total Assets: $1.13B
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Top Performing Nontraditional Bond Funds as of 05.03.2013

Legg Mason BW Absolute Return Opportunities Fund (LROAX)

Total Return: 2.16%

BTS Diversified Income Fund (BDIAX)

Total Return: 2.09%

Goldman Sachs Strategic Income Fund (GSZAX)

Total Return: 2.09%

Legg Mason BW Absolute Return Opportunities Fund (LROAX)

Total Return: 13.19%

Scout Unconstrained Bond Fund (SUBFX)

Total Return: 13.18%

Goldman Sachs Strategic Income Fund (GSZAX)

Total Return: 13.04%

Metropolitan West Strategic Income Fund (MWSTX)

Total Return: 8.42%

Hartford Unconstrained Bond Fund (HTIAX)

Total Return: 6.90%

Dreyfus Opportunistic Fixed Income Fund (DSTAX)

Total Return: 6.33%

* annualized