As yields rose in January, I reduced my exposure to intermediate-term bonds in favor of bond funds like PIMCO Income (PONDX) and Osterweis Strategic Income (OSTIX), which have a broader spectrum of fixed-income that they can invest in.

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Even before the ugly jobs report our technical indicators had already triggered a new intermediate-term buy signal on bonds from oversold levels.

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Will its rally also morph into an intermediate-term move, as has happened with treasury bonds?

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To reduce interest-rate and default risk, Ms. Benz suggests sticking with intermediate-term muni-bond funds with a high percentage of their holdings in general-obligation bonds, which are repaid with tax revenue.

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Active managers in intermediate-term securities fared better than managers in long-term securities, and managers in investment grade bonds fared better than managers in high-yield securities.

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