By Mark R. Anderson, CFA

Well it finally happened, and we are not talking about the Federal Reserve making a move or the reality TV star in the White House, but rather the fact that interest rates gapped higher. Unfortunately for bond investors, this was not a normal drift upward but something that the market has not witnessed in about twenty years. The severity of the move caught many by surprise and there were few places within the investment-grade bond market to hide as the participants were reacquainted with the term duration as the Barclays Aggregate Index lost about 3% over the quarter.