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Investors are watching for the end of rate hikes. Now may be a good time to revisit the income and total return potential of longer duration bonds.
- Historically, bond underperformance reverses around the end of a hiking cycle. The gains are significantly more meaningful for longer duration bonds. Because the market response generally happens very quickly, it’s difficult for investors to time this transition.
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Rather than trying to time the market, fixed-income investors should consider how longer duration bonds can support their income needs now — and their total return goals going forward.