Bond Funds: Nowhere To Go But Up?

For the bond market, 1994 will go down in infamy. The debacle was the worst in 60 years. Investors who thought they were being prudent by buying bond funds discovered to their horror that even the highest-quality portfolio lost value in the face of rising rates. After pouring $113.6 billion into bond funds in 1993, investors did an about-face. They took $43.5 billion more out of the funds than they put in.

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