Bond yields around the world were especially hard-hit during the outbreak of Covid19, when US Treasury yields reached all-time lows in March 2020 after the Federal Reserve slashed interest rates to near-zero levels.
In 1995, investors who parked their money in investment-grade bonds typically enjoyed yields of close to 8%, in line with the rather high inflation rates of that era. But in the last 25 years, yields have steadily fallen and nowadays, bond investors are not likely to get anywhere near that rate.
“Today, you’re getting barely above 1% for those same investment-grade securities,” says Ben Sheehan, senior investment specialist, equities, at Aberdeen Standard Investments (ASI).
