Why Bond Investors May Benefit from Actively Managed Mutual Funds and ETFs

Key Takeaways:

Passive index investment strategies are designed to mirror the composition and performance of a benchmark index. In contrast, active strategies can differ from the index in the pursuit of better returns.
Active bond funds and ETFs have the potential to outperform passive index funds, using intentional approaches for selecting bonds or setting sector weights.
Investment firms with deep resources can support the efforts of macroeconomic, fundamental, and quantitative research, and expert trading, all of which may help actively managed funds outperform their benchmarks.
Several additional active strategies for bonds may also increase opportunities for total return in excess of the benchmark, in a variety of interest rate, volatility, and credit environments.