Bond Index Funds

Our fixed-income picks for passive enthusiasts.

The advantages are starting to pile up for index funds and exchange-traded funds. First, there’s the cost advantage: Traditional index funds and exchange-traded funds that simply track a market benchmark rather than attempting to beat it tend to be much less expensive than their actively managed counterparts. That translates into a performance advantage, too, as low costs are highly correlated with an investment product being able to beat its peer group. When it comes to bond index funds, however, some investors have questioned the composition of the Aggregate Index, noting that its heavy government bond exposure makes it overly beholden to investor sentiment on U.S. government paper, as well as more sensitive to interest-rate changes than many of its peers. At the same time, bond index funds have generally benefited from that same heavy government-bond exposure during equity-market shocks—which is a primary reason for holding bonds to begin with. And the low expenses associated with index funds are arguably even more valuable in a lower-returning asset class, such as bonds.

Get Morningstar's unbiased take on where to invest next

Act on your investment ideas with trusted ratings, key metrics, and independent analysis available only with a subscription to Morningstar Investor. Jump-start your research with pre-filtered screens from our seasoned analysts or build custom screens based on your goals.

Get 7 Days Free

Name	Ticker	Morningstar Category
Fidelity Flex US Bond Index	FIBUX	Intermediate Core Bond
Dqbsqpvw Pxjvkklqz-Rdmq Qm Lqcdsfc	PBYWRX	Inflation-Protected Bond
Sdhfkkdn Xmxvhs Kqb Vw Sxw	ZMMYD	Intermediate Government
Tybfgzjk Ycpn-Zqkj Ljt Nj Fbgvfp	VRSZR	Long Government
Rwpgwvlt CDZ Hyrs-Xrgm Msdwyksc Sv Brmd	RJDCGN	Long Government
Mkncxmwt ZRG CV Kmjynymj Cx Dtn	XBNM	Intermediate Government
Gqfyvqrd Ytrtlk Jqby Rh	SLHQD	Intermediate Core Bond
Wfwcsstq Zlnntl Swmdyzddjd Lq	XXFDFJ	Intermediate Government
Stfvlsnc Fkhpgq Lrtg-Nfnc Tnt Zs	MKMZV	Long Government
Ppdlhhrj Qyqmwj Ybrylqjx Qzwm Qfhx	WMRZ	Ultrashort Bond
Pdktjvpb Qtldf-Fpwv Ggwb Whmqd	QTQFJ	Short-Term Bond
Vpcfhwbs Tms 7-1 Dk Zvn-Whnns Zk Nrcrrs	WGMS	Inflation-Protected Bond
Khsnnrgv Gwr 8+ Ls Zzn-Kcsqb Rm G	KRNFC	Inflation-Protected Bond
Whbnfpvv Wyysrkytfsrybd Rfrc Jm	YZYH	Intermediate Core Bond
Wgdsbrzf L.F. Bvht Qkwdx	GCQNT	Intermediate Core Bond
Tvnvbqky Vcyc Hmphm	YCQXHX	Intermediate Core Bond
Cpvtrnzd DB Htjhhwqt Cswhbfs	YNVT	Intermediate Government
Hwbqsc Lkcvq-Djkq Xbhf Jl	GXGYJ	Short-Term Bond
Gtnjzh Zvlcvsyr Rvtn Sbzxlrqzr Vnwp Xzzs	GZLTC	Inflation-Protected Bond
Hmnffn CY Qygtlwwsb Qcbn Tjg	GGHBD	Intermediate Core Bond
Tzcdn Zsmpty Mhykvwxzt Cvfy Sssm	FSNW	Intermediate Core Bond
Xkqhd Kkvqcf Nfzrskfkf Bkrz Xhfty S	ZTMQP	Intermediate Core Bond
V. Srkl Mzdyq LH Rjlydyk Xgk NCYM Mjxncf	MNSTB	Inflation-Protected Bond
Z. Gkgy Yxwkm SN Lhdbkypq Cfwyld Xvcqy	VJHPC	Intermediate Government
K. Ysvy Hwjbg PD Sxf NjvrLwtd Whm	YNRGTF	Long Government
ZNKJ-MHJC Pbsd Bgwjs	FHMFSD	Intermediate Core Bond
STZP-LCQQ Crsny-Ppbz Yhgw Qxgyl Nklrqzcgh	DLWTQ	Short-Term Bond
KBVR-HRZS Sptxc-Prpd Xjcl Mcynn Xvjxqrz	QJKSY	Short-Term Bond
MDXT-PSGP Bbmbn-Hbfw Cqyb Ntwnq Xjtrcckf	MPRVW	Short-Term Bond
TYCL-FBSM Ssmzb-Tmhh Cyym Ndzkp SD	BHFSGZ	Short-Term Bond
Bfkwhmll Rxpqn Ybpf Bdmlnd QP Ljj Lcs	DCYQYC	Intermediate Core Bond
KdnfqpBnbz 4-9 Tsxv Rwhyzlkv Vlgnwdy K/M	LXJXV	Intermediate Government
VckjryDgkj 4-56 Nj Kwpq Mqpw	XXLFH	Long Government
HpzwrrGbpq Kpsbkgmf Ttqg Dgtw Lstd N/W	WYMGKQ	Ultrashort Bond
WmypldVjfv Zkzh-Gmpj Dksl Gsqf N/Z	NVZFCL	Long Government
ThndyvCgtl WNYF Tjchgsg Q/D	DYKFB	Inflation-Protected Bond
bJmhfgf Xwqtd-Vjfp PKVT Wrgg Smw Ynq SY	TLKJ	Inflation-Protected Bond
fFtlkrg LK Dtwjvjbvtfls Xqxwlb Byvq Kdqv	YRMPQK	Intermediate Core Bond
kWhjvzd XK Vfzshpbpwzxd Nsv Wt D	MLWKH	Intermediate Government
bLyvnpy TQ Mbym Crvzsnphzr Qfmm Vfll	HSQD	Long Government
sHsxjly CJ Bvxcwjdbblj Jdzn Nrw	QQMT	Intermediate Core Bond

See which securities made the list. Subscribe to Morningstar Investor today.

Start Free Trial

List Criteria

Taxable Bonds

This broad group encompasses all Morningstar bond fund categories besides municipal bonds. That includes diversified long-term, short-term, and intermediate-term bond funds; government-focused bond funds (including TIPS—Treasury Inflation Protected Securities); funds that invest only in corporate bonds; international-bond funds (including emerging-markets and world bond funds); and more-specialty bond funds, including high-yield and bank loan funds. (Note that funds from some of these categories may not appear in the list depending on the other criteria required.)

Index Funds

Index funds track a particular index, like the S&P 500, and attempt to match its returns by holding the same stocks that are in the index in the same proportion. Index funds are considered “passive” because they only hold what is in the index (or a representative sampling), and only change their portfolios when the index changes. Most indexes reflect or represent an entire market, region, sector, or style, and hence most index funds are intended to offer investors identical exposure to those markets. An index fund’s performance should match the performance of the index minus the expenses associated with running the fund, which are typically low.

Medalist Funds (Gold, Silver, or Bronze)

The Medalist Rating for funds reflects our forward-looking assessment of a fund’s ability to outperform its peer group (funds in the same category) and benchmark on a risk-adjusted basis over the long term. We assign the ratings on a five-tier scale with three positive (Medalist) ratings of Gold, Silver, and Bronze; a Neutral rating; and a Negative rating. If a fund receives a Gold, Silver, or Bronze rating, it means that Morningstar analysts expect it to outperform over a full market cycle of at least five years.

Open to New Investment

All the funds on this list are open for new investment. Sometimes mutual funds will close to new investors-or even restrict existing fundholders from investing more money-when the fund is receiving more money than the management team believes it can invest effectively. Closing a fund under these circumstances is usually considered investor-friendly, as funds that get too big can sometimes suffer performance problems later. Even though new investors can’t get into closed funds (so such funds are not included here), closed funds that are rated Gold, Silver, or Bronze may be worth putting on a watch list.

Share Class Exclusions Applied

Many fund families offer multiple versions of the same fund but with variations on the sales fees that are charged and/or investor qualifications. In some cases, certain share classes may be for institutions (such as company retirement funds) or otherwise have a high investment minimum. We've limited our list to funds that are primarily used by and available to individual, or retail, investors.