This news article analyzes the performance of various bond market sectors in 2024, highlighting the strong returns of high-yield credit. It discusses the performance of ETFs like HYG and EMB, comparing them to the struggling Aggregate Bond Index and traditional fixed-income investments. The article also touches on the strategies of BlackRock's Chief Investment Strategist for Fixed-Income, Rick Reider, and his emphasis on 7% yield portfolios.
This a grim chart for the AGG decade-to-date, as it shows a negative total return from 1/1/2020 to 12/27/2024.
This blog swapped the Blackrock Strategic Income Fund entirely for the JP Morgan Income Fund has been much greater. Keep an eye on credit defaults as tracked by the credit rating agencies. As credit defaults start to rise, high-yield credit spreads will start to widen out, and you might suddenly start to find a bid in the Treasury market.
“Duration” or a bond / fixed-income ETF’s changes to interest rates has worked against bond returns this year, and decade, but really since 2022 when the Fed started moving the fed funds rate off of zero. However, by the Fed’s own admission they’ve overshot the “neutral” fed funds rate by moving to 5.375% in late July ’23, and are now in the process of bringing the fed funds rate back down to neutral, currently at 4.375%.
BOND MARKET HIGH-YIELD CREDIT FIXED INCOME AGGREGATE BOND INDEX BLACKROCK
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