This week, in what The Wall Street Journal is calling a "perfect storm" for bonds, yields on some U.S. Treasurys rose to their highest levels in nearly a quarter-century.

No wonder lots of investors are getting interested in bond funds again. And they may feel spoiled for choice. Bond funds, unlike their pathetic stock-fund siblings, regularly beat the market-by a lot.

At least that's the marketing message. Don't fall for it.

The numbers sound amazing: Over the past year, 75% of fixed-income funds outperformed the Bloomberg U.S. Aggregate Bond Index, a standard benchmark for bond portfolios. What a contrast to U.S. stock funds, where only 40% beat the S&P 500 over the same period.

Does this mean most managers of stock funds are dimwits while most bond-fund managers are geniuses?

Nope. The Aggregate bond index, nicknamed "the Agg," is a flawed measure of performance for many of the funds that brag about beating it.

Among 2,726 fixed-income mutual funds and exchange-traded funds tracked by Morningstar, 1,229 use the Agg as their primary benchmark.

The Agg consists entirely of investment-grade bonds, with approximately half its market value in Treasury securities, another quarter backed by U.S. government agencies and most of the remainder in high-quality corporate debt. Most mature in 10 years or less.

Relative to the Agg, many bond funds have been taking way more credit risk, more interest-rate risk-or both. That's made their trailing performance look great relative to the Agg. In this new, higher-rate market environment, though, those riskier strategies could go sour.

Even so, many funds that zig when the Agg zags still compare themselves to it.

Among the 1,229 funds that measure their performance against the Agg, 131 invest mainly in high-yield (or "junk") bonds. The Agg contains no junk bonds.

Also using the same benchmark are 62 "nontraditional" bond funds that may invest in anything from stock-index options and real estate to business-development companies. The Agg holds none of those.

What's more, 43 bank-loan funds, 24 municipal funds and four emerging-market funds compare their returns against the Agg-which contains no bank loans, tax-free municipal bonds or emerging-market debt.

Janus Henderson Income ETF's online home page, for example, shows the fund beating the Agg by a seemingly impressive margin of more than 2 percentage points annualized since it launched in late 2024.

The fund has 27% of its assets in bank loans and related holdings, 23% in junk bonds and 9% in mortgages not backed by a U.S. agency. The Agg's weight in those assets? Zero.

A Janus Henderson spokesperson says its presentation of performance conforms with Securities and Exchange Commission rules that require all funds to compare their performance to a "broad-based index."

The SEC also permits funds to display a "secondary index" that more closely captures how their assets are invested. Janus Henderson provides such secondary indexes for most of its bond funds, although the firm says there isn't one applicable to the Income ETF because of its particular style.

This week, J.P. Morgan Asset Management's website said "over 90%" of its active fixed-income investments "outperformed passive benchmarks" over the 10 years ended in December 2025. A footnote says this is the percent of assets, rather than the number of funds, that beat their "primary prospectus benchmark."

More than two dozen JPMorgan ETFs and mutual funds use the Agg as their primary benchmark, according to Morningstar-including two junk-bond funds, a bank-loan fund and a "flexible" ETF that had nearly 10% of its assets in emerging markets and 7% in junk bonds at the end of August.

A JPMorgan spokesperson tells me that "our disclosure on the website needs to be updated" and that the 90% figure doesn't, in fact, compare all the funds to the Agg. Instead, it's based on each fund's "performance benchmark," a secondary index permitted by the SEC that reflects the portfolios' strategies more accurately than the Agg does.

That's a fairer way to measure the returns of bond funds. Yes, 75% of bond funds have outperformed the Agg over the past year, but only 65% beat the index that was the closest match for their strategy, according to Morningstar.

Over the past 10 years, 56% of bond funds beat the Agg, but a mere 45% outperformed the index that was the best fit for their strategy.

Michael Markov, co-founder and chief executive of Markov Processes International, an investment research and analytics firm in Summit, N.J., says riskier funds that brag about beating the Agg can lead investors to confuse "unknown risk" for "known skill."

Remember, owning bonds makes sense for two main reasons: income and safety. Buying an aggressive bond fund that looks good against the Agg can lead you astray.

You might prize regular income, but if a fund beat the Agg by loading up on risky bonds, its principal value could decline just when you need stability the most.

To provide safe ballast for the rest of your portfolio in a market shock, only the highest-quality fixed income, especially U.S. Treasurys, will likely hold up if stocks and other assets crash.

That proved true in the 2008-09 financial crisis. It didn't work in 2022, when interest rates were so low that the income from bonds was too meager to provide any cushion.

For those who buy in with yields above 5%, high-quality bonds can finally work again as "stabilizers" for a stock portfolio, says Hailey Gordon, a portfolio manager at CV Advisors, an asset-management firm in Aventura, Fla. At today's yields, she adds, top-quality government and corporate bonds are yielding more than some junk bonds did for much of the past 15 years.

So, yes, bonds are suddenly more attractive, and it's tempting to try finding the bond funds that have outperformed the most. Just make sure their success isn't an illusion.