Bond Buyers Who Went Long Get Burned on Yields: Credit Markets
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Investors who snapped up the biggest supply of long-maturity bonds since March last month are being punished as interest rates climb on diminished concerns the U.S. will relapse into recession.
Corporate bonds due in 15 years or more have lost 3.15 percent since Aug. 31 while notes maturing in 1 to 10 years lost 0.67 percent, Bank of America Merrill Lynch index data show. In the three months ended in August, the longer-maturity bonds had gained 11 percent, more than double the 5 percent gain for shorter-dated securities, as record-low yields sent investors searching for higher-paying fixed-income securities.