Not all bonds decline
when rates rise.
While some investors may be concerned about rising rates, it’s important to recognize that not all bond prices go down when rates go up. As the chart shows, the "market of bonds" is exceedingly global and diverse, and many sectors have performed well during past rate hike periods.
News about the bond market tends to focus on U.S. Treasuries, which are the most sensitive to changing rates. In reality, the "market of bonds" is exceedingly diverse and global, encompassing corporate and high yield bonds, mortgage-backed securities, floating rate issuers, emerging market bonds and others. Each sector or asset class responds differently to economic and market trends. A skilled bond fund manager can diversify a portfolio in an effort to defend against threats to capital while also seeking to capture a range of growth opportunities.