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®

BlackRock Global Long/Short Credit Fund (BGCAX)

Performance (1-yr.): 3.73% Expenses: 1.47%
Performance (1-mo.): 0.01% Total Assets: $5.46B
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BlackRock Strategic Income Opportunities Portfolio (BASIX)

Performance (1-yr.): 3.58% Expenses: 0.94%
Performance (1-mo.): 0.49% Total Assets: $14.3B
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BTS Hedged Income Fund (BDIAX)

Performance (1-yr.): 0.38% Expenses: 1.97%
Performance (1-mo.): 0.21% Total Assets: $288,198
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BTS Tactical Fixed Income Fund (BTFAX)

Performance (1-yr.): 2.26% Expenses: 2.05%
Performance (1-mo.): 0.00% Total Assets: $70.46M
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Cedar Ridge Unconstrained Credit Fund (CRUMX)

Performance (1-yr.): Expenses: 1.43%
Performance (1-mo.): 0.05% Total Assets: $15.77M
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CMG SR Tactical Bond Fund (CMGTX)

Performance (1-yr.): 9.78% Expenses: 3.00%
Performance (1-mo.): 3.34% Total Assets: $12.62M
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Columbia Absolute Ret Emg Mkts Mcr Fund (CMMAX)

Performance (1-yr.): 2.24% Expenses: 1.53%
Performance (1-mo.): 0.61% Total Assets: $105.34M
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Compass EMP Market Neutral Income Fund (CBHAX)

Performance (1-yr.): 3.28% Expenses: 1.15%
Performance (1-mo.): 0.12% Total Assets: $29.12M
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Delaware Diversified Floating Rate Fund (DDFAX)

Performance (1-yr.): 1.58% Expenses: 1.01%
Performance (1-mo.): 0.16% Total Assets: $508.19M
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Dreyfus Opportunistic Fixed Income Fund (DSTAX)

Performance (1-yr.): 1.85% Expenses: 0.90%
Performance (1-mo.): 0.95% Total Assets: $230.56M
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Top Performing Nontraditional Bond Funds As of 04.22.2014

Legg Mason BW Alternative Credit Fund (LMAPX)

Total Return: 9.66%

Altegris Fixed Income Long Short Fund (FXDAX)

Total Return: 6.95%

RBC BlueBay Absolute Return Fund (RABAX)

Total Return: 6.75%

Legg Mason BW Alternative Credit Fund (LMAPX)

Total Return: 13.78%

Goldman Sachs Long Short Credit Strategies Fund (GSAWX)

Total Return: 6.59%

MainStay Unconstrained Bond Fund (MASAX)

Total Return: 6.19%

* Annualized