Fund Evaluator:
Morningstar Defensive Bond (MSTBX)
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Best Performing in Short-Term Bond Over the Last Year
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Fund Details
Morningstar Defensive Bond Overview
Morningstar Defensive Bond (MSTBX) is an actively managed Taxable Bond Short-Term Bond fund. Morningstar launched the fund in 2018.
The investment seeks capital preservation. The fund will normally invest at least 80% of its assets in a diversified portfolio of debt securities (commonly referred to as "bonds") of varying maturity, duration, and quality. Under normal conditions, the advisor intends to pursue a defensive strategy of limiting its interest-rate sensitivity by maintaining a portfolio duration of three years or less. In most market environments, the fund will not invest more than 20% of assets in fixed-income securities that are rated below investment grade (commonly known as junk bonds), or if unrated, are determined by the fund's subadviser(s) to be of comparable quality.
About Morningstar Defensive Bond (MSTBX)
There are 4 members of the management team with an average tenure of 3.87 years: Abhijeet Patwardhan (2018), Ricky Williamson (2020), Alfonzo Bruno (2025), Alexandra Cumings (2026). Management tenure is more important for actively managed funds than passive index funds.
The fund has 2 primary benchmarks: Bloomberg US Agg Bond TR USD index with a weighting of 100% and Bloomberg US Aggregate 1-3 Yr TR USD index with a weighting of 100%. Morningstar Defensive Bond has 214 securities in its portfolio. The top 10 holdings constitute 69.5% of the fund’s assets. The fund meets the SEC requirement of being classified as a diversified fund. The fund is not considered to have an ESG focus with its investment selection and management.
Morningstar Defensive Bond is part of the Fixed Income global asset class and is within the Taxable Bond fund group. Morningstar Defensive Bond has 1.7% of its portfolio invested in foreign issues. The overall assets allocated to domestic stock is 1.1%. There is 0.0% allocated to foreign stock, and 0.3% is allocated to preferred stocks. The bond allocation as a percentage of total assets is 85.8% (84.1% domestic bond, 1.7% foreign bond and 0.1% convertible bond). Morningstar Defensive Bond has 12.7% of the portfolio in cash.
Assets Under Management
The fund has $98 million in total assets, which is below the $917 million average for the Short-Term Bond category. Normally, lower assets under management translates to higher average expense ratios, and greater total assets are desired. However, for some investment categories, such as small-cap investing, it may be difficult for the manager to fully employ the desired active strategy if assets grow too large or too quickly.
MSTBX Performance and Fees
The expense ratio measures how much of a fund’s assets are used for administrative expenses and operating expenses, including adviser fees and fees for the transfer agent and custodial services. The Morningstar Defensive Bond expense ratio is average compared to funds in the Short-Term Bond category. Morningstar Defensive Bond has an expense ratio of 0.52%, which is 22% lower than its category average, making the fund expense ratio grade a C. While it is difficult to predict returns, it is known that high annual expense ratios reduce your rate of return, and excessive fees are difficult to overcome. Active management normally comes with higher expense ratios than passive index management. Certain investment categories such as small company and foreign also normally have higher expense ratios. It is best to compare fund expense ratios against the category averages for meaningful assessments.
High portfolio turnover can translate to higher expenses and lower aftertax returns. A portfolio turnover rate cannot be currently calculated for Morningstar Defensive Bond. By way of comparison, the average portfolio turnover is 135% for the Short-Term Bond category.
Recently, in the month of August 2026, Morningstar Defensive Bond returned 0.2%, which earned it a grade of F, as the Short-Term Bond category had an average return of 0.3%. The letter grades of A, B, C, D and F are based upon relative rankings within the investment category. A grade of A, for example, would indicate that the return is in the highest 20% for that time period compared to all funds in that category.
Morningstar Defensive Bond has a trailing yield of 3.82%, which is below the 4.15% category average. The fund normally distributes its income monthly.
It’s natural to seek the best-performing investments, but you must consider the relationship between risk and return and the impact of costs and taxes on your realized returns.
Morningstar Defensive Bond Grades
Year to date, the fund has returned 0.6%, 0.6 percentage points worse than the category, which translates into a grade of F. The fund has returned 2.2% over the past year (grade of D), 5.1% over the past three years (grade of C) and 2.6% per year over the past five years (grade of B).
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MSTBX Trailing NAV Total Returns Data as of 8/31/26
| Last Month |
Last Quarter |
Ann'l. 1Yr |
Ann'l. 3Yr |
Ann'l. 5Yr |
Ann'l. 10Yr |
|
| MSTBX Return (NAV) | 0.2% | 0.2% | 2.2% | 5.1% | 2.6% | na |
| MSTBX Grade | F | D | D | C | B | na |
| +/- Category | -0.1% | -0.2% | -0.6% | 0.1% | 0.3% | na |
| Short-Term Bond Avg | 0.3% | 0.4% | 2.7% | 5.0% | 2.3% | 2.3% |
| MSTBX Tax Cost Ratio | na | na | 1.5% | 1.6% | 1.5% | na |
MSTBX Annual NAV Total ReturnsData as of 8/31/26
| 2026 | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | |
| MSTBX Return (NAV) | 0.6% | 6.5% | 4.5% | 7.2% | -4.7% | 0.8% | 4.7% | 3.3% | na | na | na |
| MSTBX Grade | F | A | D | A | C | A | B | F | na | na | na |
| +/- Category | -0.6% | 0.6% | -0.4% | 1.6% | 0.3% | 0.9% | 0.5% | -1.5% | na | na | na |
| Short-Term Bond Avg | 1.2% | 5.9% | 4.9% | 5.6% | -5.0% | -0.0% | 4.2% | 4.8% | 0.7% | 1.9% | 2.5% |
| Risk Measures | |
| Standard Deviation: | 2.2% |
| Total Risk Index: | 0.18 - Low |
| Category Risk Index: | 1.09 - Above Average |
| Category Risk Grade: | D (73% Rank) |
| Beta: | 0.35 |
| R-Squared: | 85% |
| Leveraged Fund: | No |
| Inverse Fund: | No |
| Portfolio Characteristics | |
| Equity Investment Style: | na |
| Bond Investment Style: | High Quality Limited Sensitivity |
| Yield: | 3.8% |
| Dividend Distribution: | Monthly |
| Cap Gains Distribution: | |
| Total Assets: | $98 Mil |
| Fund Total Assets: | $ 99 Mil |
| Share Class Type: | Inst |
| Portfolio Turnover: | na |
Management Team
| Number of Managers: 4 | |||
| Longest Tenure: 7.8 years | |||
| Average Tenure: 3.9 years | |||
| Managers (Year): Patwardhan Abhijeet (2018), Williamson Ricky (2020), Bruno Alfonzo (2025), Cumings Alexandra (2026) | |||
Portfolio Composition (as of 7/31/26)
| # of Holdings: | 214 |
| % in Top 10 Holdings: | 69.5% |
| Fund is Non-Diversified: | No |
| % in Foreign Issues: | 1.7% |
Portfolio Allocation |
|
| Domestic Stock: | 1.1% |
| Foreign Stock: | 0.0% |
| Preferred Stock: | 0.3% |
| Domestic Bond: | 84.1% |
| Foreign Bond: | 1.7% |
| Convertible Bond: | 0.1% |
| Other: | 0.0% |
| Cash: | 12.7% |
Purchase Information
| Fund Family: | Morningstar |
| Phone Number: | 202-551-8090 |
| Website: |
| Status: | Open |
| Inception Date: | November 2, 2018 |
| Min. Initial Purchase: | $ 0 |
| Min. Initial IRA Purchase: | $ 0 |
| True No-Load: | Yes |
| Front Load Maximum: | 0.00% |
| Deferred Charge Maximum: | 0.00% |
| Redemption Charge Maximum: | 0.00% |
| 12b-1 Fee: | na |
Expenses and Fees | |
| Expense Ratio (%): | 0.52% ( Rating : Avg ) |
| Category Average Expense Ratio (%): | 0.66% |
| Share Class: | Morningstar Defensive Bond |
| Min. Subsequent Purchase: | $ 0 |
| Min. Subsequent IRA Purchase: | $ 0 |
