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To Index Bonds or Not?

John Rekenthaler (john.rekenthaler@morningstar.com)

Friday's column noted that, for the first time ever,  Vanguard Total Bond Market Index  VBMFX lags its actively managed rivals over the long term. From its 1986 inception, the fund had always beaten the trailing 10-year average return for intermediate-term bond funds. As suggested by the performance discrepancy, Total Bond Market is an unusual index fund, in that it differs meaningfully from its active competitors.