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Sunday, May 31, 2015
The purpose here is to get a sense of how various parts of the fixed income market have performed year-to-date. We are still in a world of historically low short-term yields heavily influenced by global Central Bank policy led by the U.S. Federal Reserve. In fact, the number 1 issue in markets today is when the Fed will raise rates (we are beyond the "if" stage) and the path rates will follow from there.
Here are the total year-to-date returns through 5/29/2015 as reported by Morningstar.
No advantage was gained by exploiting the yield curve as seen by the 1.68% return on IEI versus 1.66% on IEF.
Some incremental performance was garnered for investing in riskier funds as seen by the 3.03% return on the emerging market fund EMB and the 2.36% on HYS, a short-term high yield fund.
This data is provided for educational purposes. My clients and I own some funds listed in the table.