TAX-EXEMPT BOND FUNDS HIT SECOND HIGHEST QUARTERLY RETURN AS FIXED INCOME REBOUNDS FROM Q3 LOSS

Fixed income funds realized a return of positive 6.06% on average during the fourth quarter of 2023, marking a rebound from their third quarter loss (-1.70%). Fixed income funds have now reported four quarterly gains in the last five.

Tax-exempt bond funds (+6.79%) outperformed taxable bond funds (+5.81%) for the first time all year as they recorded their second largest quarterly return on record, trailing only Q3 2009 (+7.73%). Despite the nearly 100 basis point (bps) outperformance, taxable bond funds returned their highest quarterly return since Q2 2020.

Summary:

• All 51 Lipper fixed income classifications ended the fourth quarter with gains—only 11 posted a plus-side return in Q3.
• Passive funds returned a positive 6.19% compared to active’s 6.05% gain over the last three months.
• The top-performing Lipper classifications were Alternative Currency Strategies funds (+18.95%), Emerging Markets Hard Currency Debt funds, (+8.75%), and New York Municipal Debt funds (+8.56%).

Click here or the Download Full Report link in the upper right-hand column of this page to download the Fourth Quarter 2023 FundMarket Insight Report: TAX-EXEMPT BOND FUNDS HIT SECOND HIGHEST QUARTERLY RETURN AS FIXED INCOME REBOUNDS FROM Q3 LOSS

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