Thursday, December 26, 2013

A Tough Year for Bonds

This has been a terrific year for the stock market, as we've pointed out on several occasions. The S&P 500 is up by a very impressive 25 percent so far in 2013. But it has been an equally disappointing year for the bond market.

The Barclays Aggregate Capital Index functions as an S&P 500 Index for bonds. It's a broad measure covering corporate bonds, government bonds and mortgage securities. And it's down 1.8 percent for the year. This will almost certainly end up as only the third down year for the Barclays Agg since 1976.

Most bond investors, however, don't have it quite that bad. According to Morningstar, 55 percent of all bond funds have still managed to beat the index so far in 2013.

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