Key Points
LONDON, Oct 31 (Reuters) - Many of the world's biggest bond funds are facing their third straight year of losses for the first time in roughly 40 years, as a relentless U.S. economy sends bond yields to their highest levels in more than a decade...
Yet far from being put off, investors are loading up on bonds again in 2023 after bailing out of the market last year, drawn in by the same run-up in yields that has caused so much pain...
U.S. mixed bond funds - which invest in public and corporate debt - are on track for a third year of negative returns, after losing between 11% and 14% in 2022, according to financial data firm EPFR...
On the ICE BofA US Treasury index, for example, a measure called the yield-to-duration ratio shows that yields would have to rise roughly 0.85 percentage points from here to cause price falls big enough to cancel out a year's worth of interest payments, which currently stand at about 5%...
Yet plenty of investors remain wary of bonds and prefer to camp out in money-market funds, cash-like investments that currently offer high rates of return and less risk...
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