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Fixed Income: A Sea Of Red This Year

It has been a tough start to 2018 for bond investors, with government and corporate bonds across the globe delivering capital losses (yields rising). The US has led the way, with the short-medium section of the US yield curve moving up the most. This has been driven by fears of rising inflation and the prospect of interest rate increases beyond those previously forecast. This yield curve move has infected corporate bonds and emerging bonds, culminating in negative returns for both asset classes. Notably, though, credit spreads have barely moved this year, suggesting investors remain sanguine about default risk. Bond yields have...