The stock market draws a lot of investor attention, but bonds deserve some love, too. Over the 12 months ending October 31, the Bloomberg U.S. Aggregate Bond Index climbed 6.2%. On a calendar-year basis, the index is on track to post its best return since 2020, thanks in part to relatively high starting yields and solid returns from corporate and securitized debt, particularly mortgage-backed bonds.
Dodge & Cox Income (DODIX), a member of the Kiplinger 25, our favorite no-load mutual funds, has done even better. Over the past 12 months, the intermediate core-plus bond fund returned 7.0%, beating 82% of its competition. A heavy bet on securitized debt — which accounts for more than half of the fund’s assets, double the exposure the Agg index has to those IOUs — helped.
