Bond Market Under Threat On Strong Stock Returns

Bond strategists are looking to hold their ground against a backdrop that has shown them far underperforming stocks and as the market holds its breath over where rates are going.

Fixed income has been the most-hated asset class in 2013, particularly when it comes to U.S. government bonds.

Investors fear rising rates that would come with a tightening of monetary policy from the Federal Reserve, and multiple strategists have been sounding the “Great Rotation” theme in which they expect money to flee bond funds and head to stocks.

Yet the Fed is likely to do all it can to prevent the sharp run-up in rates that would create capital losses in bonds, and fund flows do show equities attracting money but not at the expense of fixed income.

CNBC

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