Expert perspective

A look back and forward at active bonds

May 11, 2023

Jeff Johnson

Principal, Head of Fixed Income Product

Bar chart showing the percentage of funds that underperformed benchmark indexes in five bond fund categories—general government funds, investment-grade intermediate funds, high-yield funds, global income funds, and general municipal debt funds—over 1, 5, 10, and 15 years. Over 1 and 5 years, only one fund category, global income, had bars lower than 50%, meaning the majority of funds outperformed the benchmark. However, the bars of all fund categories topped 50% over 10 and 15 years, meaning the majority underperformed. More precisely: Over 1 year, 82.4% of general government funds, 78.8% of investment-grade intermediate funds, 52.9% of high-yield funds, 37.0% of global income funds, and 93.2% of general municipal debt funds underperformed their benchmarks. Over 5 years, the percentages for those fund categories were, respectively, 90.2, 71.9, 72.4, 47.7, and 89.3. Over 10 years, the percentages were 98.3, 64.1, 73.4, 59.7, and 76.8. Over 15 years, they were 78.0, 70.4, 80.9, 57.9, and 76.8.
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