Morningstar bond fund analyst Michelle Canavan identified four bond funds that offer strong potential to avoid losses when rates rise. Each fund has an average portfolio duration that's below the average of peers in the same fund category. Each also possesses strengths that earned the fund either a silver- or bronze medal rating from Morningstar analysts. Those ratings are a subjective system that attempts to gauge a fund's performance prospects, not just its past record. The scale runs from gold to silver, bronze, neutral and negative.
Returns through Jan. 9, 2012