Key Takeaways
- Nearly all of the largest passive bond funds beat their peers in the first quarter, while just over half of the largest active bond funds did.
- Of the largest active bond funds, Strategic Advisers Fidelity Core Income Fund earned the best category ranking.
- Among the largest passive bond funds, the Vanguard Short-Term Inflation-Protected Securities ETF earned the best category ranking.
Even as bond yields rose across the market in the first quarter, nine of the ten largest passively managed bond funds beat their peers. It was a mixed picture for active bond funds, though, with six of the ten largest outperforming their category peers.
Among the 10 largest active bond funds, the $93 billion Strategic Advisers Fidelity Core Income Fund FIWGX ranked the highest among its peers for the quarter, placing in the 7th percentile of the intermediate core-plus category with its 0.2% gain. The worst performer of the group was the $48 billion PIMCO Total Return Fund PTRQX, which landed in the 70th percentile of the intermediate core-plus category as it lost 0.3%.
On the passively managed side, the $65 billion Vanguard Short-Term Inflation-Protected Securities ETF VTIP had the best category ranking in the quarter, landing in the 17th percentile of the short-term inflation-protected bond fund category as it rose 1%. The worst performer was the $53 billion Vanguard Intermediate Term Bond ETF BIV, which landed in the 87th percentile of the intermediate core bond category as it lost 0.3%.
Evaluating the Performance of the Largest Bond Funds
This article reviews the 10 largest active bond funds and the 10 largest passive bond funds by evaluating how each performed relative to its
. The list includes both mutual funds and exchange-traded funds. Many of these strategies, such as the $395 billion Vanguard Total Bond Index Fund VTBSX, are core holdings in portfolios, especially retirement accounts. When evaluating funds, investors should focus on long-term returns across multiple years and market cycles. At the same time, short-term returns can provide valuable information about biases and tilts within strategies.
Performance data for this article is based on the lowest-cost share class for each fund. Some funds may be listed with share classes not accessible to individual investors outside of retirement plans. The individual-investor versions may carry higher fees, meaning investors end up with less. For longer-term returns, if a share class was launched more recently than the mentioned period, an older share class was substituted wherever possible.
Q1 Performance of the Largest Active Bond Funds
The Strategic Advisers Fidelity Core Income Fund FIWGX topped the list of the largest active funds, landing in the 7th percentile of the intermediate core-plus category with its 0.2% gain. Intermediate core-plus bond funds on average lost 0.2% in the quarter. The Morningstar US Core Plus Bond Index gained 0.04% over the period.
Within the short-term bond fund category, a return of 0.2% landed the $55 billion Vanguard Short Term Investment Grade Fund in the 40th percentile. Funds in the category gained 0.16% on average in the quarter, while the benchmark Morningstar US 1-3 YR Composite Government and Corporate Bond Index rose 0.3%.
Shorter-term bonds weathered the market better than their intermediate-term counterparts in the quarter. They tend to be less affected by rising interest rates, which depress bond prices. Amid the Iran war, the 10-year Treasury yield rose to 4.29%, up from 3.97% before the war started.
The worst-performing active bond funds in the first quarter were two PIMCO funds that both earned top rankings in 2025: the $230 billion PIMCO Income Fund PIMIX and the PIMCO Total Return Fund. The PIMCO Total Return fund’s 0.3% loss put it in the 70th percentile of the intermediate core-plus bond category.
The PIMCO Income fund fell the most among the largest bond funds, posting a 0.6% loss, putting it in the 69th percentile of the multisector bond fund category. Its peers averaged a 0.2% loss, while the benchmark US Core Plus Bond Index gained 0.04%. Both PIMCO funds have higher effective durations than their category peers, meaning their holdings are more sensitive to interest rate changes.
Q1 Performance of the Largest Passive Bond Funds
The best-performing of the largest passive bond funds based on both category rank and overall performance was the Vanguard Short-Term Inflation-Protected Securities ETF. The fund placed in the 17th percentile of the short-term inflation-protected bond category based on its 1% return. This was also the highest absolute return among the largest bond funds, besting both the 0.8% average gain of its peers and the 0.9% rise of the benchmark US 1-5 Yr Treasury Inflation-Protected Securities Index.
The fund benefited from its short-term tilt, which helped shield it from rising interest rates, as well as its investments in Treasury inflation-protected securities. TIPS funds hold bonds whose interest amounts vary based on the rate of inflation, and they therefore tend to benefit from rising inflation expectations.
The worst performer among the largest passive bond funds was the Vanguard Intermediate-Term Bond ETF, which fell 0.5%, placing it in the 87th percentile of the intermediate core bond category. Funds in this category came in flat, with an average loss of 0.06% for the first quarter. The benchmark Morningstar US Core Bond Index rose 0.1%.
Second-worst was the $69 billion Vanguard Intermediate-Term Corporate Bond ETF VCIT, which landed in the 47th percentile of its category after falling 0.5% in the first quarter, the steepest loss of any of the largest bond index funds. Funds in the corporate bond category declined 0.6% on average, while the Corporate Bond Index fell 0.4%. Corporate bonds often suffer larger declines during market downturns, as they usually come with higher default risk than Treasuries of comparable duration.
Long-Term Performance of the Largest Active Bond Funds
Over the past three years, the picture is significantly brighter for the largest active bond funds, with all 10 outperforming their peers.
The highest-ranking fund based on three-year returns was the $52 billion PGIM Total Return Bond Fund PTRQX, which landed in the 15th percentile of the intermediate core-plus category based on a 5.1% annualized return.
The PIMCO Income fund, which fell the most among the largest active bond funds in the first quarter of 2026, has the highest total return over the past three years, landing in the 20th percentile of the multisector bond fund category with a 7.5% annualized return.
Long-Term Performance of the Largest Passive Bond Funds
The past three years were less rosy for the largest passive bond funds, with six of the 10 underperforming their peers. The list wasn’t without winners, with the Vanguard Intermediate-Term Corp Bond ETF landing in the 3rd percentile of the corporate bond fund category based on a 5.6% annualized gain.
The worst-performing fund was the $50 billion State Street SPDR Bloomberg 1-3 Month Treasury-Bill ETF BIL, which ranked in the 88th percentile of the ultrashort bond fund category based on a 4.7% annualized return.