REPORT

Behind the Benchmark:
Dissecting Active Bond Fund Performance

This study analyzes the long-term performance of U.S. active fixed income mutual funds and ETFs across four categories—Aggregate, Government, Corporate, and High Yield. While some active funds appear to outperform their benchmarks, this is mostly attributable to systematic exposures like credit risk. The study finds that much of the outperformance can be explained by the systematic exposures to credit factor.

Explore our findings to see how active fixed income returns can often be replicated through passive strategies, supporting the continued shift toward lower-cost, transparent investing.

Key take-away:

  • Active Aggregate and Corporate bond funds show modest excess returns
  • Regression and attribution analysis reveal little alpha
  • Technical benchmarks expose misalignment between stated benchmarks and fund risk

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