Daily Management Review

Bond investors face worst year in more than 20 years


This year could be the worst for bond investors in more than 20 years. Yields on these securities have fallen due to rising global inflation. A bad period in the bond market in recent decades has invariably been followed by a good one, experts said.

This year could be the worst for bond investors since 1999, says the Financial Times. The Barclays Global Bond Index, which measures $68 trillion worth of government and corporate debt, has so far this year posted a negative 4.8% return. 

This is mainly due to active selling of government bonds by investors due to rising inflation, notes FT.

For 40 years, the bond market has largely risen: the year-end decline has been relatively infrequent, the FT noted. In 1999 the market fell by 5.2% as investors dumped bonds to buy shares in fast-growing IT companies. Long-term bond yields now show that some investors don't want to get rid of them, because they assume that too drastic monetary tightening will hamper economic development and provoke a sell-off in stocks.

 One of the best investments at the end of 2021 was high-end aged champagne. Some types outperformed leading IT companies and Bitcoin, gaining more than 80% in value, Reuters and the FT wrote.

source: ft.com