Bloomberg Agg monthly returns amid rising rate
Source: Bloomberg Finance, L.P., as of Aug. 2, 2023. Bloomberg Agg refers to the Bloomberg U.S. Aggregate Index. 10-year Treasury yield shows the yield on the last trading day of each month.
- The traditional 60/40 portfolio had a strong start to the year, returning 11.6% after a historically poor 2022.
- Returns have been overwhelmingly driven by the 60, with the S&P 500 up nearly 19% year to date, despite high valuations and an uncertain macro backdrop.1
- The Bloomberg Agg has only returned 1.1% year to date, despite many investors’ beliefs it would benefit from elevated income and the potential for rates to retreat amid consensus expectations for recession.1
- Notably, the Agg has turned in negative returns for each of the past three months and is off to a poor, early start in August, driven by the 10-year’s steady rise combined with growing expectations that the Fed may be able to engineer a soft economic landing.1
- The Agg’s disappointing performance over the past 18 months again highlights the challenge of finding stable sources of income with low volatility outside the traditional 60/40 portfolio.