Fund Spy

4 Short-Term Bond Funds to Calm Rising-Rate Jitters

Miriam Sjoblom, CFA

Could 2018 mark the beginning of the long-anticipated bond market sell-off? By mid-January, the yield on the 10-Year U.S. Treasury note rose above 2.6% (its highest level since mid-2014), and the prognostications calling for higher yields in 2018 started rolling in.

The case for higher yields sounds reasonable enough. Developed-markets central banks, led by the Fed, have been taking steps to normalize monetary policy. The Fed has gradually hiked its target rate since December 2015 and signaled more hikes to come in 2018; it also began trimming the size of its bond portfolio starting in October 2017.

Miriam Sjoblom, CFA does not own shares in any of the securities mentioned above. Find out about Morningstar's editorial policies.