1Q in Bond Funds: Treasuries, Long-Term Bonds on Top
Funds investing in Treasuries and long-duration bonds were winners, high-yield was mixed, and foreign-currency exposure hurt as the dollar gained.
Sarah Bush: The overarching theme in the bond markets so far in 2015 has been the volatility. Everyone has their eye on the Fed. It's expected that the Fed will start to raise short-term interest rates sometime this year. There are some people thinking maybe we are looking at 2016, but consensus is still sometime this year.
We did have a big rally in the Treasury market in January. It went the other way in February, but Treasuries are still one of the best-performing parts of the market, year to date. So, funds in the long-term government-bond Morningstar Category and also anything with a lot of duration, any long-term bond category, has done well.
Sarah Bush does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.