High-yield strategies, along with ultrashort-duration strategies, dominated the list of top-performing fixed-income managers for the year ended Dec. 31, according to Morningstar Inc.'s separate account/collective trust database.
Eight of the top 10 fixed-income portfolios in the separate account universe for the year ended Dec. 31 were high yield.
For the quarter ended Dec. 31, the median return for all domestic high-yield strategies was 3.48%, up from 2.29% the previous quarter and -1.22% in the second quarter of 2013. The median high-yield return for the year ended Dec. 31 was 7.54%.
Long-duration strategies, meanwhile, continued to lag considerably behind other domestic fixed-income strategies, with a median return of -6.48% for the year ended Dec. 31.
However, long duration did perform better in the fourth quarter when compared to intermediate- and limited-durations strategies, according to Andy Kwon, data analyst at Chicago-based Morningstar.
“The median for long (duration) in Q3 was 0.1% but increased to 0.58% (in Q4),” Mr. Kwon said in a telephone interview. “It's a significant increase in the median from third quarter to fourth, (but) it's still not performing better than high yield.”
The median returns for intermediate-duration strategies and limited-duration strategies fell to 0.21% and 0.28%, respectively, for the fourth quarter, while third-quarter median returns for intermediate duration and limited duration were 0.72% and 0.52%, respectively.