Fixed income instruments offer conservative investors opportunities to obtain current income at a reasonable amount of risk. The debt market in the United States went through a few episodes of volatility in 2015, as fears of a global economic slowdown prompted many investors to flee to the safety of bonds, especially U.S. Treasury obligation instruments. After the first interest rate raise, the U.S. Federal Reserve is gearing up to continue gradually increasing the federal funds rate in 2016, which can create headwinds for the bond market. Investors who are interested in investing in diversified portfolios of fixed income instruments with passive management can do so at reasonable costs by using fixed income index mutual funds.

Fidelity Spartan Short-Term Treasury Bond Index Fund Fidelity Advantage Class

Assets under management (AUM): $962 million

2010-2015 average annual net asset value (NAV) return: 1.05%

Net expense ratio: 0.1%

The Fidelity Spartan Short-Term Treasury Bond Index Fund Fidelity Advantage Class tracks the performance of the Barclays U.S. 1-5 Year Treasury Bond Index, which is composed of U.S. Treasury obligations with maturity profiles of between one and five years. The fund uses sampling techniques to track the underlying index, and it typically maintains the maturity of its portfolio at three years or less. Due to a very low risk of default and the short-term nature of its holdings, the fund has a low 30-day SEC yield of 1.03%. The fund's average duration of 2.62 years makes it much less sensitive to interest rate changes compared to other funds with longer maturities.

The fund boasts one of the lowest net expense ratios among its peers in the short government category. The fund has received a four-star overall rating from Morningstar for its risk-adjusted performance. While the fund has no load fees, it requires investors to contribute at least $10,000 to start investing in the fund.

Vanguard Intermediate-Term Bond Index Fund Investor Shares

AUM: $22.5 billion

2010-2015 average annual NAV return: 3.91%

Net expense ratio: 0.2%

Vanguard Intermediate-Term Bond Index Fund Investor Shares tracks the performance of the Barclays U.S. 5-10 Year Government/Credit Float Adjusted Index. The index is composed of U.S. Treasury, investment-grade domestic corporate and investment-grade foreign bonds with maturity profiles of five to 10 years. The fund uses sampling techniques to minimize trading at the lowest possible tracking error. About 52% of the fund's portfolio is invested in U.S. government and agency bonds, while 25% of the fund's assets represent corporate bonds issued by industrial companies. Bonds issued by financial services companies have about 13% allocation.

The fund's average duration typically stands at 6.5 years, and its 30-day SEC yield is 2.66%. The fund has received a five-star overall rating from Morningstar. The fund does not charge its investors load fees, and it requires a minimum investment of $3,000.

Schwab Treasury Inflation Protected Securities Index Fund

AUM: $268 million

2010-2015 average annual NAV return: 2.05%

Net expense ratio: 0.19%

The Schwab Treasury Inflation Protected Securities Index Fund tracks the performance of the Barclays U.S. Treasury Inflation-Protected Securities (TIPS) Index (Series-L) SM. The benchmark index consists of all publicly-issued TIPS with at least one year until maturity, investment-grade ratings and $250 million or more of outstanding face value. All of the fund's holdings are denominated in U.S. dollars, and the fund is not exposed to currency risks from foreign holdings. About a third of the fund's assets are invested in U.S. nominal bonds, while the remainder are invested in U.S. TIPS.

Due to persistently low inflation, TIPS generated negative returns in 2015. The Schwab Treasury Inflation Protected Securities Index Fund has an average duration of 7.69 years and a 30-day SEC yield of -1.52%. Morningstar gave the fund a four-star overall rating. The fund has no load fees and requires a minimum investment of $100.

Vanguard Short-Term Inflation-Protected Securities Index Fund Investor Shares

AUM: $13.1 billion

2012-2015 average annual NAV return: -0.96%

Net expense ratio: 0.2%

The Vanguard Short-Term Inflation-Protected Securities Index Fund Investor Shares tracks the performance of the Barclays U.S. Treasury Inflation-Protected Securities (TIPS) 0-5 Year Index. The benchmark index is composed of inflation-protected public obligations of the U.S. Treasury with remaining maturities of less than five years. Because of its shorter duration, the fund is less sensitive to real interest rate risk, but it also has lower returns relative to a longer-duration TIPS fund. About 60% of the fund's holdings are U.S. TIPS, while about 30% of the fund's assets are invested in U.S. Treasury nominal bonds.

The fund has a much shorter duration of 2.3 years compared to its Schwab counterpart, making it much less sensitive to interest rate changes. The fund has a 30-day SEC yield of 0.25%. The fund received a five-star overall rating from Morningstar. The fund has no load fees and requires a minimum investment of $3,000.