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Why Bonds Had A Great Year For Doing Nothing

TedTed
in Fund Discussions
FYI: For bond markets, 2017 was a year of going nowhere, slowly—at least for the benchmark 10-year government bonds that are closely watched for signals on the economic outlook. With the risk of deflation defeated but higher inflation yet to arrive, bonds are still stuck in no man’s land as 2018 dawns.

The calm in 2017 was remarkable. The 10-year U.S. Treasury yield moved in a 0.57-percentage-point range between 2.06% and 2.63%, but ended the year close to where it started, trading Friday at 2.43%. That is the narrowest annual range of the past decade, according to FactSet data. And it is somewhat deceptive: The 10-year yield was in fact trapped between 2.2% and 2.49% on 82% of the trading days in 2017. U.K. and German bonds recorded similar performances; in Japan, there was even less excitement as the Bank of Japan held the 10-year yield steady close to zero.
Regards,
Ted
http://www.cetusnews.com/business/Why-Bonds-Had-a-Great-Year-for-Doing-Nothing-.Skq7eeVXz.html

Comments

  • MarkMark
    I'll take this kind of doing nothing any time, any year, any where:
    PCI - 21.37% total return YTD
    PDI - 19.17%
    PFL - 21.61%
    PFN - 20.87%
    PTY - 27.30%

    All return figures cited courtesy of M*
  • expatsp
    Wow, PTY... @Mark, any insight into why this fund is outperforming the other Pimco CEF's? It seems to have lower expenses too.
  • AndyJ
    edited December 2017
    As we all know, the only bonds on the planet are 10y sovereigns.
  • TedTed
    edited December 2017
    @MFO Members: The article was about treasury bonds ! The average Intermediate Government Bond Fund returned 1.53% in 2017
    Regards,
    Ted
    https://www.bloomberg.com/news/articles/2017-12-30/peculiar-year-for-markets-defied-almost-everyone-s-expectations
  • MarkMark
    edited December 2017
    @expatsp - other than it (PTY) includes corporate bonds in the mix I haven't much of a clue.

    @Ted - well then maybe the title of the article needs changing along with the statement that 'bonds' are stuck in no man's land. Obviously certain types avoided the tar pit.

    Edited to add - and granted that I should have read the whole article rather than just your posted snippet before shooting off my mouth.
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