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Nominees for 2014 Fixed-Income Fund Manager of the Year

There were many surprises in 2014's bond markets, but a few managers got it right.

Mentioned: , , , , , , , ,

Earlier this week, we announced nominees for Morningstar's Domestic-Stock and International-Stock Fund and Manager of the Year honors. Next up are the Fixed-Income Manager of the Year nominees. (Nominees in the allocation and alternatives categories will be revealed next week, and all winners will be announced on Jan. 21.)

A drop in the long end of the yield curve caught many bond managers off guard in 2014 as the yield on the 30-year U.S. Treasury rate dropped to 2.75% as of Dec. 31, from just under 4.00% at the start of the year. Although the Federal Reserve ended its quantitative easing program in October and is widely expected to raise short-term rates in 2015, long-term bond yields continued to fall, helped by low inflation in the U.S. and a slowing global economy. These forces gave a boost to U.S. Treasuries, even at historically low yields. Several of the managers nominated this year benefited from an overweighting to long-maturity bonds when most of the market was betting on an increase in long-term bond yields.

Cara Esser does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.