With stocks in a nose dive recently, many investors are taking a fresh look at bond funds.

Bond funds produce more modest results over the long term but provide fewer bumps along the way. They can be a part of any portfolio and are essential if you plan to spend your money in seven years or less.Among the most interesting are funds that don't confine themselves to one sliver of the bond market. Here are two worth considering:

Loomis Sayles Bond (800-633-3330) is run by Daniel Fuss, 64, who we've called the best bond picker in America because his fund is consistently ranked in the top 10 percent among all bond funds.

T. Rowe Price Spectrum Income (800-225-4132) invests in nine other T. Rowe Price funds, charging investors only the expenses of the underlying funds. Returns are lower than Loomis Sayles Bond, but so is risk.

Because their interest income is not subject to federal income tax, municipal bonds have traditionally yielded less than Treasury issues of comparable maturity. But 30-year munis now offer around 90 percent of the yield of a Treasury bond. If you're in the 28 percent tax bracket or higher, a muni bond's after-tax yield will be greater than that of a Treasury. Here are two different municipal-bond funds:

Strong High-Yield Municipal Bond (800-368-1030) yields a rich 5.5 percent in tax-exempt income because it invests in low-quality bonds, which tend to suffer when the economy weakens. Among its peers over the past three years, the Strong fund ranks first in total return.