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.