Why We Believe Bonds Are Back - Especially Munis

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Summary

  • The Treasury yield curve has seen a considerable shift up since the beginning of the year.
  • Today, the 10-year Treasury note is trading in line with the Fed’s expected neutral rate, and there are signs traditional bond-equity correlations are returning.
  • Due in large part to their now higher nominal yields, bonds broadly appear to be reasserting themselves as a risk ballast in multi-asset portfolios.

A man examines the inscription Bonds with a magnifying glass. Assessment of the value and profitability of securities. Investment. Terms and conditions. Face value. Raise money to finance new projects

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Nowhere To Hide

The recent market selloff has left investors with few places to hide, with substantial downside moves rippling across most asset classes. As of May 20, 2022, the S&P 500 Index and the NASDAQ Composite are

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Russell Investments is a leading global investment solutions firm with $326.9 billion in assets under management (as of 3/31/2021) and $2.8 trillion in assets under advisement (as of 12/31/2020) for clients in 32 countries, The firm provides a wide range of investment capabilities to institutional investors, financial intermediaries, and individual investors around the world. Building on an 85-year legacy of continuous innovation to deliver exceptional value to clients, Russell Investments works every day to improve people’s financial security. Headquartered in Seattle, Washington, Russell Investments has offices in 19 cities around the world, including in New York, London, Tokyo, and Shanghai.  Russell Investments’ ownership is composed of a majority stake held by funds managed by TA Associates with minority stakes held by funds managed by Reverence Capital Partners, Russell Investments' management and Hamilton Lane Incorporated.Frank Russell Company is the owner of the Russell trademarks contained in this material and all trademark rights related to the Russell trademarks, which the members of the Russell Investments group of companies are permitted to use under license from Frank Russell Company. The members of the Russell Investments group of companies are not affiliated in any manner with Frank Russell Company or any entity operating under the “FTSE RUSSELL” brand.

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