In the recent equity drawdown, bonds quietly stole the spotlight, reminding investors of the usefulness of bond exposure in a multi-asset portfolio. The chart below looks back nearly 50 years, showing the performance of bonds during equity market downturns.
Since 1976, when stocks faltered, bonds provided stability and capital preservation. Bonds acted as a counterweight to equity risk, proving to be especially effective amid market volatility and a flight to quality. Amid ongoing economic uncertainty, we believe bonds offer diversification, defense against equity risk as well as total return potential.
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