Why active management may be better for bond funds

Key Takeaways

Actively managed bond mutual funds and ETFs may deliver higher returns than passive bond funds that are designed to track the performance of an index.
Active bond managers may be able to balance risk and return seeking more effectively than passive funds.
Actively managed bond funds can take advantage of opportunities created by the size, complexity, and inefficiency of bond markets in ways that passive strategies cannot.
Managers of active bond funds may also be able to take advantage of opportunities created by changing interest-rate and credit conditions while passive funds can only seek to track an index.