Investor interest in bond funds has been exceptionally strong for the past four years; more than $1 trillion in net sales have flowed into taxable and tax-exempt fixed income mutual funds.

But unlike the rapt attention investors gave to equity funds during their last upturn (during which less popular pockets of the market were explored, puffed up with new cash, and left to catch latecomers as the cycle repeated in yet another "new" opportunity), fixed income fund investors have kept their preferences relatively simple and predictable. They have looked to yield plays in junk bonds and emerging markets on the one hand and the standard diversified portfolio that tracks the Barclays Aggregate on the other. But that "standard" portfolio has changed in important ways over the past several years and has followed investors' preferences for yield as well—clouding perceptions of relative success.

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