- Bond yields rose in the first quarter of 2024, as strong growth and sticky inflation in the US dampened rate-cut expectations.
- In credit, lower-quality and shorter-term bonds performed best during the quarter. Investment-grade spreads tightened to levels below their historical averages. The Bloomberg Global Aggregate Bond Index (USD hedged) remained broadly flat, returning 0.01% over the quarter.
- Rate cuts in the US may come later than expected, in our view, giving investors an extended window to lock in attractive yields for the long-term. In Europe and the UK, weaker growth could signal rate cuts beginning earlier.
In this edition of Vanguard’s Active Fixed Income Quarterly Perspectives, our experts provide their latest sector-by-sector analysis of global fixed income markets and how these trends could affect Vanguard’s active bond funds.
Our active bond funds managed in-house
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The value of investments, and the income from them, may fall or rise and investors may get back less than they invested.
Past performance is not a reliable indicator of future results.
Some funds invest in emerging markets which can be more volatile than more established markets. As a result the value of your investment may rise or fall.
Funds investing in fixed interest securities carry the risk of default on repayment and erosion of the capital value of your investment and the level of income may fluctuate. Movements in interest rates are likely to affect the capital value of fixed interest securities. Corporate bonds may provide higher yields but as such may carry greater credit risk increasing the risk of default on repayment and erosion of the capital value of your investment. The level of income may fluctuate and movements in interest rates are likely to affect the capital value of bonds.
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