Bonds over the next decade: some thoughts

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Now that the demise of Lehman Brothers is making headlines again, we believe it is appropriate to take stock of the returns of fixed income investments over the past ten years. What are the main factors which have led to these extraordinary results? What may we expect from monetary institutions going forward? And what are our recommendations? In order to discuss historical returns, we must look at the entire cycle, including adverse periods. In order to increase the objectivity even further, we work with indices. The rolling annual returns between September 12, 2008 and September 12, 2018 are somewhat of a surprise. Global equities (MSCI World) come out on top with a 9.7% return. In the fixed income segment, ‘Euro high yield’ bonds have yielded by far the best results. Indeed, they managed to return 8.9% in a low volatility climate compared to European equities (MSCI EMU), yielding 4.6%. Euro government bonds, euro corporate bonds, global government bonds of developed countries and emerging market government bonds have tallied returns ranging between 4.3% and 4.9%.