Bonds Prove Best Financial Asset to Own for First Time Since at Least 1997

BLOOMBERG: For the first time since at least 1997, the bond market produced the highest returns of any financial asset, beating stocks, commodities and the dollar as Europe’s sovereign-debt crisis threatened the global economy.

Led by U.S. Treasuries, fixed-income securities worldwide returned 5.81 percent, including reinvested interest, this year through Dec. 29, Bank of America Merrill Lynch indexes show. The Dollar Index tracking the U.S. currency against six peers rose 1.6 percent, while the Standard & Poor’s GSCI Total Return Index of commodities fell 1.18 percent and the MSCI All Country World Index (MXWD) of shares tumbled 6.9 percent with dividends.

“The year was one of tremendous volatility, brought on by increasing global and political economic uncertainties, which drove investors massive flight to quality into bonds,”Christopher Sullivan, who oversees $1.9 billion as chief investment officer at United Nations Federal Credit Union in New York, said in a telephone interview on Dec. 27. “There has been a general softening of expectations for growth and inflation worldwide, and bonds have thrived.” … (more)

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Updated: December 30, 2011 — 10:31 pm
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