Beware of Rate Risk in Passive Core Bond Funds
Passive core bond funds have some advantages, but don’t expect protection when interest rates rise.
This article is part of Morningstar's Guide to Passive Investing special report.
Passive funds in the intermediate-term bond Morningstar Category come with a built-in safety net of low fees, typically clocking in at about 10 basis points, compared with a broad Morningstar Category median of 68 basis points. They also carry less credit risk than their typical competitors, making them reliable diversifiers during periods of credit stress.
Karin Anderson has a position in the following securities mentioned above: DODIX. Find out about Morningstar’s editorial policies.