Fixed income is still often thought of as a realm where active managers may eke out extra returns for their investors, but the best performing taxable bond mutual fund of the last ten years is an index fund.
According to Morningstar data, the top ten performing taxable bond funds over the decade ending on Oct. 20, 2020 comprise a mix of active and passive long-dated funds.
Year-to-date, the The iShares Core U.S. Aggregate Bond ETF (AGG), which tracks the Bloomberg-Barclays U.S. Aggregate Bond Index, has returned 6.51%, and 3.7% in the 10 years ending October 20, 2020.
The decade’s top returners all at least doubled AGG’s performance.
10. PIMCO Long Duration Total Return Fund (PLRIX) 7.54%
PIMCO’s $3.5 billion long-duration total return fund carries a 1.07% expense ratio. It has offered a 7.54% total return over the past 10 years, with a 14.37% return year-to-date.
9. Vanguard Long-Term Corporate Bond Index (VLCIX) 7.59%
Vanguard’s $5.5 billion corporate bond index has posted 7.59% returns for the decade ending Oct. 20, and 8.49% year-to-date. The fund carries a 0.05% expense ratio – the lowest among the list of top returners.
8. Cohen & Steers Preferred Securities & Income Fund (CPXIX) 7.68%
This $10 billion Cohen & Steers fund invests in the preferred universe and carries an 0.86% expense ratio. It has returned 7.68% over the past 10 years, and 2.04% year-to-date.
7. Delaware Extended Duration Bond Fund (DEEIX) 7.82%
This $558 million extended duration fund carries a 0.57% expense ratio. Over the past decade, it has offered investors a 7.82% return, and it’s returned 8.99% year-to-date.
6. Vanguard Long-Term Investment Grade Fund (VWETX) 7.94%
The largest among the top 10 by total assets, this $20.4 billion Vanguard fund carries a 0.12% expense ratio, according to Morningstar. It’s returned 7.94% over the past 10 years, and 11.55% year-to-date.
5. SEI Long Duration Fund/SEI Institutional Investments Trust (LDRAX) 7.99%
SEI’s long duration fund returned 7.99% over the past 10 years, and has offered a 13.96% return year-to-date. The $1.3 billion fund carries a 0.37% expense ratio.
4. Wasatch-Hoisington U.S. Treasury Fund (WHOSX) 8.09%
Wasatch-Hoisington’s U.S. treasury fund returned 8.09% over the past 10 years, buoyed by a 20.73% year-to-date return. The $526.5 million fund is the smallest among the top 10, and it carries a 0.69% expense ratio.
3. PIMCO Long-Term Credit Bond Fund (PTCIX) 8.82%
PIMCO’s mammoth $3.5 billion long-term credit fund carries a 0.84% expense ratio. Over the past decade, it offered 8.82% returns, and it has returned 7.41% year-to-date.
2. PIMCO Extended Duration Fund (PEDIX) 10.19%
PIMCO’s $1.2 billion extended duration fund carries a 1.71% annual expense ratio, the highest among the top 10. Over the past decade it offered 10.19% returns, and it has returned 25.15% year-to-date – the highest year-to-date returns among the top 10.
1. Vanguard Extended Duration Treasury Index (VEDTX) 10.39%
Vanguard’s $1.8 billion Extended Duration Treasury Index charges an ultra-low 0.06% annual expense ratio. Over the past decade it offered 10.39% returns, and it has returned 24.73% year-to-date.
