The Bloomberg Barclays US Aggregate Bond Index is currently having its worst yearly return since 1994. To put 2018’s disappointing return into perspective, the Bloomberg Barclays US Aggregate Bond Index has registered only 3 negative total return years in the past 40. At Astoria, we are not surprised by this year’s disappointing US bond returns. We have long warned about the challenges that bonds face in an environment where valuations are expensive (hence, no margin of safety), US rates are rising, and US inflation is trending higher...
