Over the past five years, bond investors haven't had much to complain about. A $10,000 investment in the basic Barclays Capital U.S. Aggregate Bond Index, which tracks a hodgepodge of debt issued here, back then would be worth more than $15,000 today. But a select group of bond mutual fund managers have handily beaten trumped that return. Below, as part of our annual best-funds list, we've highlighted 25 of the top taxable bond funds.

Dreyfus International Bond (DIBAX)

• Manager: Dave Leduc
• Assets: $1.3 billion
• Top holdings: Government debt of sweden and Japan

Also See

• The Top 100 Mutual Funds
• The Two Faces of Janus

Bets on the debt of U.S. blue chips such as Coca-Cola and IBM as well as savvy currency hedges have helped this fund leapfrog past peers since the financial crisis. Last year comanager Dave Leduc began trimming higher-yield holdings, including Spanish and Italian debt, when their gyrating prices signaled danger. He's now bullish on emerging markets like Mexico and U.S. corporate stocks outside the financial sector. For those who prefer less exposure to the euro and yen, Los Altos, Calif., adviser Don Martin suggests a sister fund, Dreyfus Emerging Markets Debt Local Currency (DDBAX).

Templeton Global Bond (TPINX)

• Manager: Michael Hasenstab
• Assets: $56.7 billion
• Top holdings: Korea national debt (various coupons)

This fund has been trading foreign debt for more than 25 years. It lost almost 9 percent when markets swooned late last summer, but it has beaten its benchmark bond index by, on average, more than five percentage points a year for the past 10 years. Kimberly Adams, chief financial officer of the financial-planning firm ProVise Management Group, says she has put some of her clients' money in the fund because while it's more volatile than most of what she owns, it tends to come out on top. Manager Michael Hasenstab, whom Morningstar named bond manager of the year in 2010, acknowledges the challenges of investing in a global market that's ever in flux: "There are developed countries that are becoming emerging ones and emerging countries that are becoming developed," he says. To help cut the risk, the 38-year-old manager seeks out emerging markets with both strong growth prospects and low levels of debt. Two favorites: Korea and Indonesia.

Metropolitan West Total Return Bond (MWTRX)

• Manager: Tad Rivelle
• Assets: $17.5 billion
• Top Holdings: U.S. Treasurys, Fannie Mae-backed mortgages

Methodology

SmartMoney asked Morningstar for a list of the top-performing funds over the past five years from four separate categories: U.S. Stocks, Foreign Stocks, Bonds and Alternatives. From there, we whittled down the list, eliminating funds that charge high annual expenses and have high minimum investments. We also wanted to highlight funds that any investor can get into, so we took out funds that are only available in retirement plans or are closed to new investors.

This $17 billion go-anywhere bond fund, run by a group of Pimco alumni, has roughly matched returns of the far larger and better-known Pimco Total Return over the past decade. In general, the MetWest fund displays a conservative bent, says Lipper analyst Jeff Tjornehoj. Tad Rivelle, one of the fund's three comanagers, says the MetWest fund "skinnied down" on corporate bonds after spotting a credit glut in 2007, then bought them back when these bonds' prices plunged a year later, during the financial crisis. About 40 percent of the fund is mortgage-backed securities, but Rivelle is also bullish on the debt of big U.S. financial companies, including Goldman Sachs and JPMorgan Chase, which he sees as discounted because of the problems assaulting their European counterparts. "There's a certain amount of overreaction," he says.

AllianceBernstein High Income (AGDAX)

• Assets: $3.3 billion
• Top Holdings: AllianceBernstein Fixed-Income Shares, Republic of Venezuela 7.65%

This fund aims to find attractive yields, wherever they might be lurking. That means they tend to own debt that is "the low-rated of the low-rated" says Lipper analyst Jeff Tjornehoj, but "they've managed to find undervalued securities at the right time." After losing nearly a fourth of its value in 2008, the fund posted 62 percent gain in 2009, rocketing past peers. The fund had made a big bet on emerging market bonds but has cut back after a recent rally. Co-manager Gershon Distenfeld says he sees better value in U.S. high-yield "junk" bonds and the debt of U.S. financial firms, which trade at depressed prices. While the market remains wary of these high-yield companies, many have been cutting debt. The fundamentals are in good shape," he says.

Lord Abbett Income Fund (LAGVX)

• Asset: $1.3 billion
• Top Holding: Freddie Mac debt, Altria Group bond with 9.95% coupon, Time Warner Cable

This fund specializes in bonds rated "BBB," debt hovering just above investment grade. That stance has helped boost the fund's yield but poses risks in a down market, says S&P Capital IQ analyst Dylan Cathers. Lord Abbet's managers emphasize there is a big difference between their fund and alternatives that target junk bonds. "There's something special about that demarcation line," says co-manager Robert Lee. One area where managers see value right now: bonds of energy companies such as Canadian Oil Sands. While their profits can reflect swings in energy prices, the energy producers have enough reserves to pay the bonds.

Name	Ticker	1-Year Return (%)	5-Year Average Annual Return (%)	Expenses per $10,000
AllianceBernstein High Income	AGDAX	1.8	8.7	95
CM Advisors Fixed Income	CMFIX	5.0	6.3	90
Delaware Corporate Bond	DGCAX	5.1	7.2	95
Delaware Diversified Income	DPDFX	4.9	7.7	93
Dreyfus International Bond	DIBAX	4.3	9.1	109
Fidelity Capital & Income	FAGIX	-0.8	6.9	76
ING Pioneer High Yield Portfolio	IPHSX	0.2	7.6	96
Janus Flexible Bond	JANFX	4.9	7.3	59
Loomis Sayles Core Plus Bond	NEFRX	6.0	7.6	90
Loomis Sayles Investment Grade Bond	LIGRX	4.5	7.0	81
Lord Abbett Income	LAGVX	5.0	7.4	90
Metropolitan West Total Return Bond	MWTRX	3.9	7.4	63
PIMCO Foreign Bond	PFBDX	9.2	8.0	90
PIMCO Investment Grade Corporate Bond	PBDAX	5.0	8.0	90
Putnam American Government Income	PAGVX	4.6	7.5	85
Putnam U.S. Government Income	PGSIX	4.1	7.5	84
T. Rowe Price U.S. Treasury Intermediate	PRTIX	7.5	7.4	51
Target Intermediate-Term bond	TAIBX	4.0	7.4	66
Target Total Return Bond	TATBX	4.7	7.7	67
TCW Core Fixed-Income	TGFNX	5.4	8.0	78
TCW Emerging Markets Income	TGINX	3.0	10.1	125
TCW Total Return Bond	TGMNX	3.3	7.8	74
Templeton Global Bond	TPINX	-0.2	9.2	88
Thompson Plumb Bond	THOPX	2.4	7.3	80
Vanguard Intermediate-Term Treasury Investor	VFITX	7.2	7.2	22