The fixed-income strategy that has been “working” over the past several months is elongating duration when the 10-year Treasury Yield hits 2%, then simply riding down the curve when rates near 1.5%. Portfolio managers that have gritted their teeth, trusted the Fed, and used this channel to their advantage have been handsomely rewarded. Now that the 10-year Treasury rate is back at the upper end of its trading range, will history repeat itself, or will the rising rate believers finally have their day in the sun?
With both bonds and equities starting to reintroduce volatility, where can a conservative income investor “hide out” and wait for better opportunities?