Earn Up to 6% From Our Fund Portfolios

Our mutual fund and ETF portfolios deliver attractive yields while helping to lower risk.

(Image credit: alexxx1981)

If you own a mix of stocks and bonds, you may expect the stocks to cause you periodic bouts of anxiety. But it’s bonds that have been acting up lately, and in coming years they may not live up to their reputation as a portfolio sedative.

After benefiting from declining interest rates for decades, bond investors are now bracing for rates to rise over the next few years as the economy heats up. That prospect has sent bond yields soaring and pushed down prices (which move in the opposite direction). From July 8, 2016, through the end of the year, the yield of the benchmark 10-year Treasury note rose from less than 1.4% to 2.5%—a stunning jump. Over that period, investment-grade U.S. bonds slumped by 3.2% on a total-return basis. And that could be just the start of a long, painful period for bond investors. “By the next presidential election, we’ll see the 10-year Treasury at 6%,” predicts Jeffrey Gundlach, comanager of DoubleLine Total Return Fund, a member of the Kiplinger 25.

Subscribe to Kiplinger’s Personal Finance

Be a smarter, better informed investor.

Save up to 74%

Sign up for Kiplinger’s Free E-Newsletters

Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.

Profit and prosper with the best of expert advice - straight to your e-mail.

Sign up

To continue reading this article
please register for free

This is different from signing in to your print subscription

Why am I seeing this? Find out more here

Daren Fonda
Senior Associate Editor, Kiplinger's Personal Finance
Daren joined Kiplinger in July 2015 after spending more than 20 years in New York City as a business and financial writer. He spent seven years at Time magazine and joined SmartMoney in 2007, where he wrote about investing and contributed car reviews to the magazine. Daren also worked as a writer in the fund industry for Janus Capital and Fidelity Investments and has been licensed as a Series 7 securities representative.