Taxable Fixed Income 2Q21 Market Review & Outlook

July 14, 2021 — Fixed income investors had a reprieve after a tough first quarter. Longer rates fell 25 to 30 basis points and credit spreads tightened. Front-end rates rose on a more hawkish tone from the Fed, which caused a pronounced flattening of the yield curve. The result was positive returns across all major fixed income markets, with longer-duration and higher-yielding markets outperforming. Credit outperformed core markets (3.2%), while MBS lagged (0.33%), and longer-duration components of Treasury and credit indices returned 5% to 7%. Given the positive trend in risk markets and tighter overall spreads, non-core fixed income markets had strong returns, with high yield returning 2%, and preferred stocks and emerging market debt in the 3% to 4% range.

  • DATE: July 14, 2021
  • TYPE: PDF
generic image

Featured Insights

generic image
Fixed Income

Where to Find Income in a Low-Interest Rate World

The Fed’s announcement last week that would pull rate hikes forward by six months was somewhat of a surprise for investors. The good news is that it doesn’t really change . . .

Learn more >

generic image
Fixed Income

Negative Yields? A Tsunami of Liquidity is Pressuring the Cash Investor

The wave of cash flooding into bank deposits and money market funds is threatening to test the line in the sand between zero and negative yields. What are the alternatives . . .

Learn more >