Fundsupermart Recommended Funds List 2025/26: Our top choices for Bond and Balanced Funds!

We are celebrating the 25th anniversary of our Recommended Funds list this year! First published in 2001, the list was created to help investors make more informed investment decisions, and we have continually refined and improved it over the years.

This year’s list features 46 Recommended Funds, all of which are best-in-class within their respective categories. This article will focus on our recommended Bond Funds and Balanced Funds. For our recommended equity funds, check out the article below!

Fundsupermart Recommended Funds List 2025/26: Discover the Best-In-Class Equity Funds

Our Bond & Balanced Recommendations

We have 14 Bond Funds and 2 Balanced Funds in our Recommended list this year (Tables 1 and 2).
Fixed income markets generally did well over the past year. Elevated global rates supported returns, while strong demand for yields continued to drive credit spreads tighter, further boosting performances across most bond segments.

Nonetheless, interest rate uncertainties have also increased. Fed cut expectations oscillated throughout the year depending on the latest inflation data, comments from Fed officials, or even tweets from President Trump. In addition, ultra-long-end yields in the US and Europe have remained persistently elevated or even moved higher despite declines in short-end rates, reflecting concerns over the long-term inflation outlook and fiscal sustainability. Finally, macroeconomic uncertainties still pose upside risks to already-tight credit spreads.

In this environment, it is imperative to select fund managers who have not only proven their mettle in volatile markets but also demonstrated nimbleness in allocating their investments. Our Recommended Funds below are all managed by strong investment teams, including managers who have shown their ability to navigate uncertainties and ultimately deliver superior risk-adjusted returns.

Table 1: Recommended Funds - Bonds

Table 2: Recommended Funds - Balanced

Notable changes

Our recommendations for Balanced Funds were unchanged this year. Instead, we made adjustments to various Asia and Global categories and added two new ‘Enhanced Liquidity Solution’ categories. Read on for more details on the changes!

1. Asia Bonds

We expanded our Recommended List to three funds this year (from two previously)! Manulife Asia Pacific Investment Grade Bond Fund and Schroder ISF Asian Local Currency Bond Fund retained their spots, while Eastspring Investments – Asia Select Bond Fund is a new addition!

The Eastspring Investments – Asia Select Bond Fund integrates top-down analysis (interest rate / credit / currency strategies) with bottom-up analysis to select the best credit issuers. Lead portfolio manager (PM) Goh Rong Ren has extensive experience in the fixed income segment, including in local-currency bonds and rates, where he has been able to generate additional alpha.

A key feature of this fund’s process involves generating a proprietary internal credit rating for every bond under coverage. This ensures the team has a clear view of the credit quality of each issuer, especially those unrated by the three major agencies, hence allowing the team to better identify potential market mispricings.

Both the Manulife and Eastspring funds have solid track records and are strong options for investors (Chart 1). Investors seeking (i) a more flexible fund with potentially larger high-yield exposures for yield enhancement (Eastspring: ~10%); or (ii) a USD-based fund, perhaps to complement existing SGD holdings, may find the Eastspring fund to be a better fit.

(Note: The Manulife fund is managed from a SGD perspective with a mandate to hedge ≥70% of its exposures to SGD.)

Chart 1: Peer comparison for Asia Bonds

2. Global Bonds

We also expanded our recommendations here to two funds (from one previously): PIMCO Income Fund and T. Rowe Price Diversified Income Bond Fund.

PIMCO Income Fund is a household name and among the largest actively-managed bond funds globally. It is extremely diversified across nearly 7000 holdings (as of 30 June 2025), with exposures spanning sovereigns, securitised credit, bank loans, and corporate credits. Its latest-reported portfolio has a large allocation to agency MBS. Overall, the fund offers a globally diversified portfolio, with a flexible strategy able to access virtually all corners of the global bond universe.

T. Rowe Price Diversified Income Bond Fund is another of our recommendations. Similar to the PIMCO Fund, it is diversified across the global bond universe, with flexibility across geographies (including currencies), duration and curve management, and security selection. Its latest portfolio has a large allocation to developed market sovereigns (alongside emerging market sovereigns too), with the top 10 issuers accounting for 20% of the fund (Table 3).

To us, both PIMCO and T. Rowe Price funds are strong considerations (Chart 2). The PIMCO Income Fund currently has a larger allocation toward MBS, while T. Rowe Price has maintained its large exposure to a diversified pool of sovereigns and just ~3% in securitised credit, but both have displayed their ability to navigate global bond markets. Nonetheless, investors may wish to consider that the PIMCO Income Fund offers an indicative distribution yield of around 6.5%, while the T. Rowe Price fund offers a higher indicative yield of closer to 7.5%. On the other hand, the PIMCO fund allows for investments in both Cash / SRS, while the T. Rowe Price fund only allows for Cash investments.

Table 3: Top 10 holdings of the T. Rowe Price fund

Chart 2: Peer comparison for Global Bonds

3. Asia High Yield Bonds

Our latest pick here is the United Asian High Yield Bond Fund, which invests in Asian debt securities which are either non-investment grade or unrated. The fund aims to achieve a total return comprising both high income and capital appreciation.

This fund primarily invests in USD-denominated bonds, with a mix of bottom-up credit selection and top-down macro analysis to identify its preferred sectors and geographies. Duration is kept close to its benchmark, while additional FX exposures (e.g. through local-currency bonds) are limited, with the team focusing on its core strengths of macro and credit analyses.

The fund team recently added significant exposure to China HY bonds (especially in July), while trimming its Hong Kong exposure (Chart 3). The team remains cautious in the China Real Estate segment but is open to selective opportunities in higher-quality names (including LGFVs) with better access to capital markets.

In our view, individual credit selection is key in Asia HY markets, and the higher credit risks in China HY segments are largely commensurate with higher yields. We believe the worst of China’s real estate market downturn may be behind us, and a higher exposure here can be justified where rigorous credit analysis is applied.

The United fund’s track record demonstrates its ability to better withstand downturns in this challenging bond segment (Chart 4). Its negative 5-year returns reflect the broader market decline, but its drawdown is markedly less severe than peers, while other performance and risk metrics stand well above peer averages.

Chart 3: United Asian HY Bond Fund has recently added China exposure

Chart 4: Peer comparison for Asia High Yield Bonds

4. Global High Yield Bonds

Our newest pick within this space is the BNY Mellon Global Short-Dated High Yield Bond Fund! This fund focuses on short-dated bonds, which help to provide greater cashflow visibility for each credit, while being less rate and spread-sensitive compared with traditional high-yield bond funds.

This team primarily invests in bonds expected to be repaid within two years, including those with call dates in this time horizon. It actively targets issuers which it believes are better-positioned to call their bonds early (due to stronger fundamentals / cashflows), before markets have fully priced in the callability of such bonds. As high-yield bonds typically come with calls above par (e.g. at 102 instead of 100), this allows the fund to harvest additional call premiums.

Cashflow visibility is at the core of the team’s credit selection process. For instance, the team favours the TMT sector, where cashflows can be projected with greater precision (e.g. by multiplying a company’s subscriber base with its monthly fee). Other selection factors include the bank covenants of each company – looser bank covenants are preferred as they give issuers extra flexibility in liquidity in times of stress. In addition, analysts will look strongly at the overall debt maturity profile of each company, as earlier-maturing bonds will be paid earlier and may hence have a higher probability of being repaid. These all point toward a strong focus on visible cashflows.

This fund’s volatility metrics are fairly comparable to peers, but it stands out considerably based on its strong 5-year annualised returns and (low) maximum drawdowns (Chart 5). The significantly lower drawdown is testament to the team’s focus on cashflows and the strategy’s track record of no defaults for over a decade.

Related article: Q&A Series: High Yields / Low Defaults: A lower-risk alternative to high-yield bonds

Chart 5: Peer comparison for Global High Yield Bonds

5. Enhanced Liquidity Solutions

Following the addition of a Money Market (USD) category last year, we have now added an ‘Enhanced Liquidity Solutions’ category this year! Demand for cash-management solutions remains robust, as investors continually seek to enhance their fixed income yields without taking much duration risk.

Our picks here are the iFAST SGD Enhanced Liquidity Fund and the iFAST USD Enhanced Liquidity Fund. These offer T+0 (same-day) settlement, making them among the most liquid options for nimble investors. Their primary objectives are similar: to preserve capital and provide a high level of liquidity, followed by enhancing yields where possible. The commitment to preserving capital is clear, with both funds displaying zero drawdowns since inception (Chart 6).

Looking ahead, the fund team will continue to prioritise capital preservation and liquidity. It will continue to invest in high-quality fixed income securities, including fixed deposits, sovereign and corporate bonds, and various unit trusts (including money market and short-duration bond funds).

Related article: 3 ways to manage your cash – suitable for all investors!

Chart 6: Both funds have had zero drawdowns since inception

Final thoughts

For more information on our Recommended Funds, you may check out our full report here!

In these uncertain times, fixed income assets can provide stable income while serving as a solid foundation for long-term returns. We hope our Recommended Funds list offers clear guidance on the best Bonds and Balanced funds with proven track records. With these funds, investors can approach their respective investment goals with greater confidence and ultimately invest globally and profitably.

Declaration: For specific disclosure, at the time of publication of this report, IFPL (via its connected and associated entities) and the analyst who produced this report hold NIL positions in the abovementioned securities.