Here’s the best way to invest in bonds for the long term, according to these five-star portfolio managers

A fixed-income team at Morgan Stanley points to two less conventional corners of the bond market as contributors to their fund's returns: distressed debt and frontier local-market investing. Distressed debt refers to bonds of issuers under financial stress, often trading well below face value. Frontier local-market investing means buying bonds denominated in the currencies of smaller or less-developed economies.

Both approaches sit at the higher-risk end of fixed income. Distressed securities can deliver strong returns when an issuer recovers or restructures favorably, but they can also suffer sharp losses if credit conditions deteriorate. Frontier local-currency debt offers diversification beyond developed markets, yet carries added currency, liquidity and political risk.

For long-term bond investors, the takeaway is less about copying any single strategy and more about understanding what drives returns. Distressed and frontier positions tend to behave differently from mainstream government and corporate bonds, so their role in a portfolio — and the risks they introduce — deserve scrutiny. Investors may want to watch how credit cycles and currency moves affect these segments over time.