We see income, or carry, reasserting itself as the key driver of bond market returns. Scott explains.
Coupon income historically has contributed the lion's share of total returns across global fixed income markets. Yet declining yields this year elevated the role of capital appreciation in generating returns. Price appreciation made up roughly three-quarters of U.S. Treasury returns in the first quarter, we estimate.
We see carry, or income, reasserting itself as the key driver of returns in bond markets in the quarters ahead, taking back the reins from price appreciation, as we write in our