One of the most surprising things to come out of the first half of 2022 was the walloping fixed income investors received from bonds. The Bloomberg U.S. Aggregate Bond Index posted its worst 12-month return in its entire history, which caused many investors to shed exposures, particularly longer-term sectors.

Now that the dust has settled a bit, talking to investors about reconsidering the space is very much an uphill battle. I get it. Inflation continues to rise, further rate hikes are on the horizon, and recent returns are the worst in decades. That doesn’t present a very attractive scenario for a fixed income investor. But let’s have a look at where things are likely to go as opposed to where they’ve been.

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