Columbia Threadneedle Fixed-Income Monitor: March 2024

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Track fixed-income opportunities with this monthly update.

One way to identify opportunities in fixed income is to look at bond yields. That’s because yield, which is based on a bond's price and coupon payments, reflects total return potential. Yields can change over time and across bond sectors.


Spread, which refers to difference between a bond’s yield and the risk-free rate (e.g., U.S. Treasuries with the same duration),1 indicates how much investors are being compensated for taking on additional credit (default) risk. If spreads are above their long-term average, investors are being paid more to take on credit risk; if they're below their long-term average, investors are being paid less.


Our proprietary Fixed-Income Monitor compares yields and credit spreads over 20 years of history and across fixed income. It’s designed to help investors identify opportunities and risks in the asset class.


Chart shows how much fixed-income investors are currently being paid to take on excess risk. Agency mortgage-backed securities are currently the most attractive. High yield, investment-grade bonds and emerging market debt are below the 50th percentile over the historical range.

Key takeaways for March 2024

  • Treasury yields continued to move higher as the market reassessed the Fed’s policy path. The market is currently pricing in the Fed's projection of three rate cuts in 2024.


  • Credit assets (investment grade, high yield) posted strong performance, resulting in tighter spreads. But they continue to present attractive opportunities, with yields at historically high levels.


  • Municipal bonds delivered positive total returns, with performance in longer maturities supported by limited supply and strong demand. Taxable-equivalent yields exceed yields in several high-quality taxable sectors and may be compelling for investors across multiple income tax brackets.


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