Unconstrained bond funds generally fall into a broad category of fixed income strategies that defy the neat categorization investors have come to expect from the investment fund landscape. Morningstar defines the unconstrained category as funds that use both tactical duration management and more-concentrated sector allocations relative to traditional bond strategies. Unconstrained funds tend to gain popularity among fixed income investors in environments that can prove challenging for traditional bond sectors, such as during periods of rising interest rates as well as low-yielding interest rate environments. These strategies can potentially offer benefits to investors on a standalone basis and within the context of a broader fixed income allocation. The benefits might include better relative performance in a rising interest rate environment, reduced correlation to existing fixed income holdings and an ability to derive return from credit premiums. Unconstrained bond strategies can complement traditional core fixed income strategies benchmarked against the Bloomberg Barclays US Aggregate Bond Index (the “Agg”) in a well-diversified portfolio, potentially providing a higher level of income and improving risk-adjusted returns across various interest rate environments and stages of an economic cycle. There are, however, potential pitfalls involved in unconstrained bond investing that investors should evaluate carefully.