Index funds are generally seen as being a better option than actively-managed funds, since they have lower fees and they tend to produce competitive performance versus active managers over time. Still, bond index funds might be in a difficult position here since they tend to be concentrated in the lower-yielding segments of the market that have performed well in recent years and have little room for further appreciation.
Yesterday, Daniel Putnam of InvestorPlace took a look at this issue in his article, "For Bond Investors, it's Time to Get Active". His conclusion: it may be time for investors to take a fresh look at actively managed bond funds. Find out why here.