ETF Specialist

Raising the Bar for Active Bond Managers

Alex Bryan, CFA

A version of this article appeared in the August 2018 issue of Morningstar ETFInvestor. Download a complimentary copy of Morningstar ETFInvestor by visiting the website 

Active managers in the intermediate-term bond Morningstar Category have fared much better against their category index over the past decade than their counterparts in most U.S. equity categories. That’s largely because the category benchmark, the Bloom­berg Barclays U.S. Aggregate Bond Index, does not adequately represent the depth and breadth of the pond where active managers in this category fish. The index skews heavily toward low-yielding U.S. Treasuries and agency mortgage-backed securities, which have little credit risk.

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