It’s time for a bond fund check-up

Published On Oct 7, 2024, 8:00 AM

Bond investors are warned to reassess their risk exposure as interest rates remain higher than the post-2008 average. Vanguard's analysts predict that despite potential rate cuts from the Federal Reserve, interest rates should stay generally elevated. The yield on the 10-year Treasury is climbing back towards 4%, influenced by stronger-than-expected job numbers. Investors are advised to conduct regular reviews of their bond fund strategies amidst shifting market conditions.

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Stock Forecasts

BSVView BSV chart on TradingView

Negative

Higher interest rates could negatively affect bond prices and performance. Investors may want to position themselves in short-term funds to mitigate risks of price drops in long-term bonds.

BNDView BND chart on TradingView

Positive

As the Fed may cut rates in the near future, there may still be potential for some bond funds to perform moderately well, depending on the duration and risk profile.

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