Tailwinds to headwinds
To illustrate the rapid changes in perceptions, consider where fixed income stood just a few months ago (at the end of April to be exact).
A diversified portfolio of high quality bonds, as defined by the widely followed Barclays U.S. Aggregate benchmark, had delivered strong returns over the last 20 years (Figure 1). The 1-,
3- and 5-year annualized returns stood at 3.6%, 5.4% and 5.6% respectively. For the 10-year period, it had generated an annualized return of 5.0%.