January 10, 2023

After One of the Worst Years on Record, Fixed Income Funds End Year on High Note

by Jack Fischer.

Fixed income funds realized a return of positive 2.82% on average during the fourth quarter of 2022. This was the first positive quarterly performance for fixed income funds of the year and the largest quarterly return since Q2 2020.

Of the 51 Lipper fixed income classifications, 49 ended the quarter with plus-side quarterly returns. In each of the first two quarters of 2022, all 51 classifications realized sub-zero performance. In the third quarter, 48 posted a loss. All 51 classifications improved on their quarterly returns in the final quarter of 2022.

Summary:

  • Taxable bond funds (+2.65%) underperformed tax-exempt bond funds (+3.31%) in quarterly performance for the second time in the last three quarters.
  • The top performing Lipper classifications over the course of Q4 were Emerging Markets Local Currency Debt Funds (+8.57%), Emerging Markets Hard Currency Debt Funds (+8.47%), International Income Funds (+5.55%), Global High Yield Funds (+4.58%), and California Municipal Debt Funds (+4.21%).
  • Alternative Currency Strategies Funds (-1.33%), General U.S. Treasury Funds (-0.14%), Short U.S. Government Funds (+0.55%), General U.S. Government Funds (+0.62%), and Short-Intermediate U.S. Government Funds (+0.66%) closed the quarter as the worst-performing classifications.
  • All eight macro-groups reported gains during the quarter for the first time since Q1 2021. The top three macro-groups during Q4 were World Taxable Fixed Income Funds (+6.08%), Short-Term/Intermediate Corporate Fixed Income Funds (+3.69%), and Single State Municipal Debt Funds (+3.39%).

Click here or the Download Full Report link in the upper right-hand column of this page to download the Fourth Quarter 2022 FundMarket Insight Report: After One of the Worst Years on Record Fixed Income Funds End Year on High Note

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