This article was produced by New England Asset Management (NEAM) as part of their valued industry partnership with Insurance Investor.
Investment-grade bonds staged a comeback in 2025, overcoming a year marked by significant economic policy uncertainty. The ICE BofA Aggregate Bond Index surged to a total return of 7.1%, a substantial improvement from 1.5% in 2024, with gains split equally between price appreciation and income. Interest rates dropped considerably across the curve: short- and intermediate-term maturities fell by about 70 basis points, the 10-year yield declined 40 basis points, while the 30-year yield remained stable.
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