Ratings agency Lonsec has given four fixed income funds its highest rating after a review of the sector.
The UBS Australian Bond Fund, the Vanguard Australian Fixed Interest Index Fund, the EQT Pimco Global Bond Fund and the Goldman Sachs JBWere Core Plus Australian Fixed Income Fund all received a highly-recommended rating.
Lonsec looked at 17 fixed income funds across the Australian, global and diversified fixed interest sectors.
Bonds have seen sharp price increases over the course of the financial crisis as investors looked for safety in government assets.
"The market turmoil of 2008 confirmed the belief that boring is sexy during troubled times," Lonsec investment analyst Rui Fernandes said.
But global and diversified fixed income funds have also incurred losses due to the devaluation of the Australian dollar late last year, while changes to Australian taxation laws have meant currency hedging gains and losses are now carried on the income account.
"In response, some managers stopped distribution payments in order to be able to offset these losses," Fernandes said.
The lowering of interest rates by central banks during the crisis has sparked the return of more traditional fixed income investment strategies, he said.
"Interest rate stability in previous years had effectively neutralised fixed interest portfolio management strategies such as duration management and yield curve positioning," he said. "The current environment has seen a comeback of such strategies."
But Fernandes said it was unlikely these strategies would be here to stay.
"Duration worked in 2008 because there was a lot of activity by central banks to cut rates. I don't think duration is going to be the strategy going forward."
