Fixed Income Sector Performance (Total Return as of 12/31/15)
Chart of the Week for January 29, 2016 - February 4, 2016
The fixed income market includes many different types of securities, and their comparative performance can vary substantially. The chart above compares the performance of eleven major fixed income sectors for the one year periods ended December 31, 2015 ("current year") and December 31, 2014 ("prior year"). Six of the eleven sectors shown rose in the current year compared to all eleven sectors shown producing positive returns in the prior year.
Returns were lower in the current year compared to the prior year as interest rates were generally higher and uncertainty about U.S. monetary policy impacted fixed income markets. Shorter-term securities generally outperformed longer-term securities. The prior year's top performer, U.S. Long-Term Government, went from a positive 24.66% return to a negative 1.16% return. The leading positive sector in the current year was U.S. Municipal Bonds with a return of 3.30%, as the supply of new bonds being issued was less than the demand for those securities.
High Yield Bonds posted negative returns in the current year after posting positive returns in the prior year, as concerns about falling oil prices and the impact on high yield fixed income issuers continued to impact the sector.
Emerging Markets returns in U.S. dollars were positive in both years, as high yield debt issued by some Emerging Market countries, such as Russia, performed well in the current year. The Global fixed income sector went from positive in prior year to negative in the current year in U.S.dollar terms, as interest rates generally stayed low in countries around the world.
Posted by: sarah_oz@yahoo.com
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