Bond Markets Grapple With Economic Uncertainty

2018 delivered a reality check to bond investors, with meagre and sometimes negative returns across global markets

Morningstar Analysts 10 January, 2019 | 9:49AM

World currencies

2018 delivered a reality check to bond investors. Rising US interest rates, a strengthening dollar, escalating trade fears, and myriad geopolitical tensions further rattled markets at points throughout the year, which ended with a meagre single-basis-point return for the Bloomberg Barclays US Aggregate Bond Index. 

The broad intermediate-term bond Morningstar Category lost 50 basis points for the year, though funds with less duration and more-tailored exposure to US Treasuries outperformed those with a significant overweight in corporate credit. 

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