Investing - Theory, News & General • Re: Should You Pay for Actively Managed Bond Fund?

Nvidia stock has 100x over the past ten years. An active manager who underweighted, or gasp excluded it, will now have a nearly impossible time beating the market. There is no bond that is going to 100x relative to the rest of the bond market. An active bond manager doesn't have to worry about upside risk that stock managers have to contend with. Bonds are contracts. It makes perfect sense to me that an active bond manager could outperform passive bonds funds, although often they don't. The muni market seems to intuitively have many areas where an active manager can help, but beware of lack of actual outperformance regardless of theory. Imagine a state raises taxes, leading to higher volume of muni issuance and lower yields...does that really mean as a national out-of-state investor you want to own more? Many NR muni bonds are extremely secure and tied to things like people paying their water bill, which might be just as safe as a highly rated state with an impending pension disaster. So I think 0.12 vs 0.03 is well worth it for VCRM compared to VTEB but also wouldn't be overly surprised if VTEB has similar or better performance over a multidecade period.

Statistics: Posted by GeorgiaGuy — Mon Sep 21, 2026 11:48 am