By David Falkof | 07-08-10
Deflationary concerns and a flight to quality have combined to produce terrific returns for long-term government bond funds. The 30-year U.S. Treasury bond's yield has fallen from 4.64% at the beginning of the year to 3.99% as of July 8, 2010. The long bond last traded under 4% in May 2009, when deflation was at the forefront of investor concerns. This quick, sharp drop in yield has upped the returns of bond prices and long-term government bond funds.
The category's 14.94% year-to-date gain through July 7 is the best of all fund groups at mid-year. That's not close to the long-term government funds' 52.3% average 2008 gain, but it is far better than the 44.1% the typical fund in the category lost last year. (more)
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