These days bond fund managers have every reason in the world to protect their investors by closing their funds, with interest rates almost certain to rise and talk of a bond bubble on the lips of many commentators. But to the dismay of some critics, the doors remain wide open.

It's not that managers don't recognize the higher risk of owning bonds. Many bond managers have started telling investors to expect returns to be lower-significantly lower than the gangbusters results some bond funds saw in 2009. "Last year was a case of the rising tide lifts all boats," says Tony Crescenzi, a bond fund manager at Pimco. Pimco's flagship product, Total Return, gained more than 13 percent in 2009, its best year since 1995; it's up 6 percent this year.

But not a single bond fund has closed to new investors, according to Morningstar. Meanwhile, many bond funds have ballooned in size. Pimco's Total Return has $234 billion in assets, making it the largest single fund in the country. At the same time, people keep plowing money into fixed-income funds-nearly $140 billion in new money has flowed into bond funds already this year. "I'm very concerned, because the flows have been unprecedented," says Eric Jacobson, the director of fixed-income research at Morningstar.

Fund firms counter that they have no reason to close bond funds. The bond world is huge, they say, representing about $90 trillion worth of debt worldwide. All the new government debt is creating plenty of opportunities for bond fund managers to put the new money to work, Crescenzi says. One stock-centric fund, however, is closing to new investors, specifically because it sees problems in the bond world. In early May the Oakmark Equity & Income fund, which has one-third of its $18 billion of assets in bonds, stopped taking most new investors. Most fixed income has "little margin of safety," says Edward Studzinski, the fund's comanager.

Clearly, not all bonds move in lockstep; some fixed-income products will withstand an interest-rate jump better than others. Most financial planners aren't advising investors to bail out of bonds-but many of them are warning their clients to expect lower total returns. "We are telling clients that bond performance could be subpar for some time," says Lewis Altfest, a financial planner in New York.

The Fears of Some Bond Bears

"It's a no-brainer. Every single human being should have that trade: short Treasury bonds in the U.S."
-Nassim Taleb, professor, New York University

"From any angle, there is clearly evidence for a big bubble in the bond market."
-Walter Zimmermann, vice president, United-ICAP, a technical analysis group

"There will be a terrible problem [in municipal bonds]."
-Warren Buffett, chairman, Berkshire Hathaway