It is hard to believe that it has been over one-year since COVID-19 became a household word while changing the world forever. During that time, the markets sank and rebounded as investors reacted to heightened uncertainty, reassessed liquidity and risk tolerances, and finally looked forward. During the first quarter of 2021, fixed income investors finally felt comfortable enough to acknowledge the improving outlook and the possibility of higher yields. The benchmark 10-yr Treasury began the year at 0.92% but moved solidly northward to finish at a yield of 1.74% by quarter-end, which was where it was in January of 2020. Treasuries and corporates within the index suffered, as they both finished down over 4%, while other sectors did marginally better but remained in the red. There were few places to hide from this relatively large rate move but our portfolios held up relatively well vs. their indices. The Bloomberg Barclays Aggregate Index lost 3.37% in the quarter, while the Barclays Intermediate Govt./Credit Index finished down 1.86%.
Read the full newsletter here: INVESTMENT OUTLOOK Q1 2021.