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Is there a way to turn that off or must I use a SET to get just the records I have in my database?
No switch. You can use a bag or set. The main question is, what your "index" is for. If it's not really necessary for positioning/ordering the elements, the you can safely switch to a bag or set.
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Also is there an example of where you want a collection populated with nulls when no objects exist?
I admit it looks a bit strange on the first view. But when you think a bit about it, it's the only logical way. Either that column is an index for your collection than hibernate has to put the element at this position or it's not an index and then your "list" isn't really a list (from a semantical point of view).