Bonds enter first bear market in at least 30 years

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The bond market has entered its first bear market in more than 30 years.

The Bloomberg Global Aggregate Total Return Index has now dropped more than 20% below its peak, the biggest drawdown since its inception in 1990. It’s an index of both government and investment-grade corporate bonds.

A bear market is usually... The bond market has entered its first bear market in more than 30 years — and possibly much longer. The Bloomberg Global Aggregate Total Return Index has now dropped more than 20% below its peak, the biggest drawdown since its inception in 1990. It’s an index of both government and investment-grade corporate bonds.The bond market downturn has come due to rampant inflation in the western world, and the efforts by central banks to tame it.

Data from NYU, which tracks the return of U.S. Treasury bonds and Baa-rated corporate bonds, show this is likely the worst year for U.S. fixed income since at least 1928. The downturn has spelled devastation for the traditional 60/40 portfolio that is meant to shield investors from the volatility of the stock market. Data from Bespoke Investment Group shows the 60/40 portfolio has lost 14% this year, its worst performance since at least 1976.

 

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inflation...

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