Across bond markets in April, yields were grinding lower and prices moving higher. With consensus firmly in the higher yield camp, the Street struggled to explain the move lower in yields. Reasons cited included rising Covid variants cases outside the U.S., sluggish global growth, and technical factors.

Still, low rates will persist as recently reaffirmed by the Federal Reserve to mitigate the economic impact of the ongoing coronavirus pandemic. Expect all fixed income portfolios to face continued investment income erosion through 2023/24 due to lower reinvestment yields. Shorter maturity portfolios will see this impact much sooner then longer maturity portfolios.

SAA Monthly Investment Review: April 2021
View PDF