The Top Funds Over Five Years: Bond Funds Take the Lead
Context is always important when looking at historical return data, especially five-year performance for mutual funds.
The period covered in this year’s Top Funds Over Five Years article starts on January 1, 2007—months before the severe bear market started. As of the end of 2011, neither the S&P 500 index nor the broader Wilshire 5000 index had rebounded back to the price levels they traded at at the start of the five-year period that this article covers.
The five-year period also saw a large drop in interest rates. Yields on the benchmark 10-year Treasury bond fell from 4.71% on December 29, 2006, to 1.87% on December 30, 2011. Since bond yields and prices are inversely related, bonds rallied over the past five years.
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