Financial Professionals


Q2 2015

While equity markets inched slightly higher in Q2 of 2015, bond markets struggled, reminding us that this more “conservative” asset class is not immune to losses. Often (but not always) when interest rates broadly rise, as they did in Q2, bonds tend to decline. How to diversify a portfolio with both equity and bond risks is top of mind for many investors.

Performance of Bonds vs. Hedge Funds During Periods of Interest Rate Hikes

The data above show the comparative performance of the HFRI Fund of Fund Index (blue bars) and the Barclays Aggregate
Bond Index (green bars) when the yield on the U.S. 10-Year Treasury Bond rose 1.00% or more.

Over the course of these eight periods going back to 1993, the Fund of Funds Index produced positive performance in all
periods, while bonds dropped in price in most. This speaks to the value alternative strategies can add to a portfolio.

Read More

Past performance is not a guarantee of future results.

Virtus Investment Partners provides this communication as a matter of general information. The opinions stated herein are those of the author and not necessarily the opinions of Virtus, its affiliates or its subadvisers. Portfolio managers at Virtus make investment decisions in accordance with specific client guidelines and restrictions. As a result, client accounts may differ in strategy and composition from the information presented herein. Any facts and statistics quoted are from sources believed to be reliable, but they may be incomplete or condensed and we do not guarantee their accuracy. This communication is not an offer or solicitation to purchase or sell any security, and it is not a research report. Individuals should consult with a qualified financial professional before making any investment decisions.