Fund Idea Top Fixed Income Funds 2Q 2021: What happens when U | FSMOne SG - Research Highlights

Fund Idea

Top Fixed Income Funds 2Q 2021: What happens when US Treasury Yields freefall from Year-highs?

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• The performance for fixed income markets in 2Q was a far cry from that of the volatile first quarter. Despite trading rangebound in April-May, June’s sharp fall in yields was met with a rally across the bond universe, particularly the credit segments.

• Global bonds rose 1.3% while emerging market (EM) bonds and global high yields (HY) saw the biggest gains of 3.0% and 3.1% respectively, in USD terms

• On aggregate, fixed-income funds on our platforms have raked in returns of 1.83% over the quarter, with the best-performers being EM Bonds funds at 3.02% and the worst-performers being Asian HY bond funds at -0.28%.

• As treasury yields fell across the 2nd quarter, so did most fixed income segments across the investible universe. 11 out of the 12 main bond categories – from global bonds to US HY – are currently trading at yields of 5-year lows.

• Looking ahead, we see pockets of value emerging in one segment of the fixed income markets. Read more to find out what it is.

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