High-yield strategies maintained their dominance among the 10 best performing fixed-income managers for the year ended June 30, according to Morningstar Inc.'s separate account/collective trust database.
Indeed, there were few changes in the rankings from the previous quarter.
Four of the top 10 portfolios were high yield, while two were short term, two were ultrashort, one was long government and one was intermediate; the exact same makeup as the prior quarter.
“The top 10 managers were almost identical, just a different order,” said Andy Kwon, data analyst at Chicago-based Morningstar. “High yield seems to be dominating, but if you drill down into it by corresponding months, it had its lowest periods (in April, May and June) than in the last nine months.”
The median return for domestic high-yield bonds in the quarter ended June 30 was -1.22%, down from 2.79% in the previous quarter. Meanwhile, the median return for limited duration was -0.45% for the quarter ended June 30, intermediate duration was -2.24%, and long duration was -5.67%.
The median return among all domestic fixed-income separate account portfolios was 0.94% for the 12 months and -1.93% for the quarter ended June 30. The Barclays Capital Government/Credit index returned -0.62% for the year and -2.51% for the quarter; the Credit Suisse High Yield index returned 9.18% for the year and -1.38% for the quarter.
“The trend (in fixed income) seems to be moving down, and moving down pretty fast,” Mr. Kwon said. “There are a ton of negative returns, so that's where all the weight is sitting.”