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Over the past month, fixed income investors finally caught a break. The Fed’s first rate cut since 2024 signaled that the long fight against inflation is entering its closing stages. Treasury yields have begun to edge lower, and with them, a broad recovery has taken hold across income sectors.
Investment-grade and high-yield bonds both rallied as credit spreads tightened. Mortgage-backed securities outperformed Treasuries, and for the first time in a year, rate-sensitive assets began acting like they used to offering capital appreciation as yields slipped.
What follows is our sector-by-sector review of how the past month unfolded and how each asset class stands to benefit from a falling-rate environment.
The current yield on our Alternative Fixed Income Portfolio is 9.69%.
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