April 8, 2021

As the Global Economy Begins to Reopen, Fixed Income Investors Reduce Interest Rate Risk

by Jack Fischer.

FMIR Report Q1 2021

Fixed income funds posted a return of negative 0.94% on average during the first quarter of 2021. Both taxable bond funds and tax-exempt bond funds reported negative performance (-1.26% and -0.08%, respectively), marking their first quarters of negative performance since the start of the pandemic in Q1 2020.

First Quarter Highlights:

  • Specialty Fixed Income Funds led all fixed income Lipper classifications returning 2.00% on the quarter, representing their largest return since Q2 2009.
  • General U.S. Treasury Funds brought up the tail end, after providing a return of negative 8.27%, resulting in their lowest quarterly return since Q4 2016.
  • General Domestic Taxable Bond Funds posted a negative average group return (-0.22%), but the macro-group showcased three of the four top quarterly performing Lipper classifications: Specialty Fixed Income Funds (+2.00%), Loan Participation Funds (1.55%), and High Yield Funds (+1.11%).
  • The bottom five performing Lipper classifications for Q1 2021 were: General U.S. Treasury Funds (-8.27%), Emerging Markets Local Currency Debt (-6.41%), Corporate Debt A-Rated Funds (-4.19%), Corporate Debt BBB-Rated Funds (-4.03%), and International Income Funds (-3.89%).

Click here or the Download Full Report link in the upper right-hand column of this page to download the First Quarter 2021 FundMarket Insight Report: As the Global Economy Begins to Reopen, Fixed Income Investors Reduce Interest Rate Risk.

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