At long last, “there’s income back in fixed income,” says Fidelity Strategic Income (FADMX) fund co-manager Ford O’Neil. The Bloomberg Aggregate U.S. Bond index now yields better than 5%, which “makes us optimistic about this asset class,” he adds.
The backdrop, of course, is the terrible year that bonds had in 2022, as the Federal Reserve raised interest rates. (Bond prices and interest rates move in opposite directions.) Strategic Income – a member of the Kiplinger 25, our favorite no-load mutual funds – lost 11% that year, compared with a 13% decline in the Agg index.
But over the past 12 months, the multisector bond fund has excelled, with a 4.0% return, outpacing the Agg index and its peers.
