From Kiplinger · · 1m
Bond Market Rout Explained
Bond market drops less than 1% this year despite rising rates and inflation fears.
In brief
Bond market drops less than 1% this year despite rising rates and inflation fears. U.S. Treasury bonds fell less than 1% in 2024 as alternatives like floating rate ETFs offer higher yields. Originally reported by Kiplinger.
Bond Market Performance
The Bloomberg U.S. Aggregate Bond Index is down less than 1% for the year through August 2024.
Rising Interest Rates
U.S. Treasury pays its highest interest rates on long-term debt in roughly 20 years.
Alternative Investments
Funds like Fidelity Floating Rate Income (FFRHX) and Janus Henderson AAA CLO ETF (JAAA) outperform traditional bonds with 4%+ returns.
Bond Market Alternatives
Options-powered ETFs such as Calamos US Equity Autocallable Income (CAIE) pay 10%+ with minimal interruption.
Capital Preservation
Money market funds and short-term certificates of deposit pay 0.25-0.50 percentage points more as Fed tightens.
Bond Market Outlook
High-yield bonds outperform investment-grade corporate and government debt despite rising rates.
What's Next
Investors should review income, diversification and capital preservation strategies as bond markets adjust to higher rates.
Here's the gist
U.S. Treasury bonds fell less than 1% in 2024 as alternatives like floating rate ETFs offer higher yields.
