Only two other points in the roughly 45-year history of the U.S. investment-grade corporate bond market have been this bad for returns, according to BofA Global.
Analysts at the bank pegged the sector’s negative -10.5% return so far this year as its third-worst stretch on record, eclipsed most recently by its minus -14.3% performance from August and October of 2008, following the collapse of fabled Lehman Brothers investment bank. The harsh selloff in debt issued by highly rated companies comes as U.S. Treasury yields have shot higher, with the benchmark 10-year TMUBMUSD10Y rising this week to 2.8%, its highest level since December 2018, according to Dow Jones Market Data. Corporate bonds are priced at a spread, or premium, above the risk-free Treasury yield, to help compensate investors for default risks.
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