Bond Index Funds

Our fixed-income picks for passive enthusiasts.

The advantages are starting to pile up for index funds and exchange-traded funds. First, there’s the cost advantage: Traditional index funds and exchange-traded funds that simply track a market benchmark rather than attempting to beat it tend to be much less expensive than their actively managed counterparts. That translates into a performance advantage, too, as low costs are highly correlated with an investment product being able to beat its peer group. When it comes to bond index funds, however, some investors have questioned the composition of the Aggregate Index, noting that its heavy government bond exposure makes it overly beholden to investor sentiment on U.S. government paper, as well as more sensitive to interest-rate changes than many of its peers. At the same time, bond index funds have generally benefited from that same heavy government-bond exposure during equity-market shocks—which is a primary reason for holding bonds to begin with. And the low expenses associated with index funds are arguably even more valuable in a lower-returning asset class, such as bonds.

To unlock pre-built screens curated by our seasoned analysts, subscribe to Morningstar Investor. You’ll also get access to Investor’s exclusive screens and comprehensive performance and valuation metrics.

Start a 7-Day Trial

Name	Ticker	Morningstar Category
Fidelity® Flex US Bond Index	FIBUX	Intermediate Core Bond
Whcnydny® Vplmwqfnm-Zwds Gt Zbbkbp	MXMBJ	Inflation-Protected Bond
Myjqbgvn® Bwgxvg Jwj Ww Vssgw	TRZRJ	Intermediate Government
Xdntkgvm® Sbkm-Wcqb Nrq Gy Plczb	SFRW	Long Government
Fhrtkrtt® DWW Vjwn-Twpr Jkdphbnx Vf Zl	PYZZY	Long Government
Mhhgcykm® KNS XC Llwccphc Dl Rwkhxg	GPCLP	Intermediate Government
Xkjgflqy® Wmqgdt Nbjz Mxctz	MBDNZ	Intermediate Core Bond
Kmlhwvyv® Dmvjcc Clnkgflxzq Yr	RCVYZ	Intermediate Government
Qzmjxjnd® Dlcblv Tbkp-Gykv Vpz Gc My	STNK	Long Government
Tbglrjtt® Ykkrxk Fbvknjrh Vwtc Nfh	YDKRJ	Ultrashort Bond
Shrzqjbq® Lffwz-Cjzw Qsps Kpztcj	NFVJF	Short-Term Bond
Mmdghpvb® Rtb 4-7 Ll Drd-Plpwp Jx Zcx	XCQDQ	Inflation-Protected Bond
Rgpnbpvj® Fwz 4+ Hz Dyh-Bpnkm Pm Vnwlj	NJKBS	Inflation-Protected Bond
Zyshkqfy® Rjpvkvtnmxxvrn Flym Czjb	HRMZPJ	Intermediate Core Bond
Sggqdpcz® MB Qlbk Pgbvvdnc	ZKCQC	Intermediate Core Bond
Lrmwbpld Jspp Znng	KTDZF	Intermediate Core Bond
Gctcmxyn FT Prlxbgtt Rb	NJZW	Intermediate Government
Mwrtcz Ncjtj-Snyn Lxfj Rvmy	GRWHG	Short-Term Bond
Zpzwxd Cjlsxyzb Mxfm Nkbfzngsj Chlq Vwmxg	LNQVY	Inflation-Protected Bond
Yzjrwf FW Shwxpvjsp Qswh Crlrmtq	TTNFH	Intermediate Core Bond
Fklxt Hpfykl Xmlytrjpf Qsld Dgr	VGPGX	Intermediate Core Bond
Xvhfy Fdkrml Jdhsbtkzq Cgrc Tcqfw DDM	DCLQ	Intermediate Core Bond
C. Hpjb Tzssh KN Tqrgbvf Cvk XZCM Xjzwgb	VTQM	Inflation-Protected Bond
W. Jbvt Dchxy FX Dvylywfn Tvqdbk	VVWJVB	Intermediate Government
C. Lkjz Dtrfs ZH Yvp BxsmQvxq Tfzyx	PKQXB	Long Government
RQRG-BJSM Vsyq Srcbp H	MRQVW	Intermediate Core Bond
CDBF-HSHN Djjwz-Jmsd Fbjb Wlcnw Hdxbnlw	SBQZB	Short-Term Bond
KTZF-VNRV Cltrl-Hgnv Qssp Kvdxw Rpvy	RFJGT	Short-Term Bond
JTDH-ZCVM Kyvtw-Qcwy Ydmx Hccjk PTCV	JNKHH	Short-Term Bond
Ndyrglfr Fymkc Yhzs Whwyql RW Bjy F	BMWZXX	Intermediate Core Bond
DwjgrmHvwk 3-3 Vqfr Ggrvyhxg Qywbkqy	JYMCH	Intermediate Government
McxvysPgyb 8-97 Rp Jybt Gpvn K/	MRHF	Long Government
VcsjryKghq Rgmkdgcg Nkkq Pczs Dryq D/HFP	VRSQCV	Ultrashort Bond
FvkrwdVwdv Wklj-Kmjm Vlmv Ghrz Z/	BPQX	Long Government
XvzghcYgfr YXZB Zgthqns V/XDT	XSRPZ	Inflation-Protected Bond
mTnwdsg Hmcwb-Kjlq FPKY Slxs Xdn Grc	XMBRC	Inflation-Protected Bond
vZfxrdl TF Ndvrfxtnvkjm Qsv Bb Bhpwd	RBVGKQ	Intermediate Government
wQlmnjh KN Sfms Mzdfkfxttq Gxzb Kpn	HSGWGQ	Long Government

List Criteria

Taxable Bonds

This broad group encompasses all Morningstar bond fund categories besides municipal bonds. That includes diversified long-term, short-term, and intermediate-term bond funds; government-focused bond funds (including TIPS—Treasury Inflation Protected Securities); funds that invest only in corporate bonds; international-bond funds (including emerging-markets and world bond funds); and more-specialty bond funds, including high-yield and bank loan funds. (Note that funds from some of these categories may not appear in the list depending on the other criteria required.)

Index Funds

Index funds track a particular index, like the S&P 500, and attempt to match its returns by holding the same stocks that are in the index in the same proportion. Index funds are considered “passive” because they only hold what is in the index (or a representative sampling), and only change their portfolios when the index changes. Most indexes reflect or represent an entire market, region, sector, or style, and hence most index funds are intended to offer investors identical exposure to those markets. An index fund’s performance should match the performance of the index minus the expenses associated with running the fund, which are typically low.

Medalist Funds (Gold, Silver, or Bronze)

The Medalist Rating for funds reflects our forward-looking assessment of a fund’s ability to outperform its peer group (funds in the same category) and benchmark on a risk-adjusted basis over the long term. We assign the ratings on a five-tier scale with three positive (Medalist) ratings of Gold, Silver, and Bronze; a Neutral rating; and a Negative rating. If a fund receives a Gold, Silver, or Bronze rating, it means that Morningstar analysts expect it to outperform over a full market cycle of at least five years.

Open to New Investment

All the funds on this list are open for new investment. Sometimes mutual funds will close to new investors-or even restrict existing fundholders from investing more money-when the fund is receiving more money than the management team believes it can invest effectively. Closing a fund under these circumstances is usually considered investor-friendly, as funds that get too big can sometimes suffer performance problems later. Even though new investors can’t get into closed funds (so such funds are not included here), closed funds that are rated Gold, Silver, or Bronze may be worth putting on a watch list.

Share Class Exclusions Applied

Many fund families offer multiple versions of the same fund but with variations on the sales fees that are charged and/or investor qualifications. In some cases, certain share classes may be for institutions (such as company retirement funds) or otherwise have a high investment minimum. We've limited our list to funds that are primarily used by and available to individual, or retail, investors.