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Fund Spy

It May Not Have Been the Month You Thought It Was

Treasuries weren't the only casualty in May 2013.


At this point you've probably heard that May 2013 was a bad month for bonds. With the exception of the shortest-dated debt, Treasury bond yields rose across the maturity spectrum by similar amounts; the 10-year note gapped out roughly 50 basis points during the month. With a few exceptions, longer-maturity Treasuries naturally lost more than their shorter cousins. The losses incurred were some of the sharpest suffered over a single month in a long time. The Barclays U.S. Treasury Index tumbled 1.7%.

If you've been listening to the pundits, meanwhile, you also probably know that  PIMCO Total Return (PTTRX) suffered losses last month; it fell 2.15%. Interestingly, the fund's outsized pain didn't trace to its increased stake of conventional Treasuries from the month before, but mostly to a long-standing, long-maturity allocation to Treasury Inflation-Protected Securities (and a bit to the fund's 8% emerging-markets allocation). At the same time, the Barclays Aggregate U.S. Bond Index fell 1.8%, while the average intermediate-term bond fund bettered both with a 1.6% loss.

Eric Jacobson has a position in the following securities mentioned above: PTTRX. Find out about Morningstar’s editorial policies.