Recent equity market volatility has raised concerns for many investors. However, bonds have proven to be a stabilizing force, delivering positive returns amidst market turbulence.
Bonds play a vital role in diversified portfolios, offering both diversification and a hedge against equity risks during market declines. Since 1976, bonds have outperformed stocks 100% of the time during major drawdowns, with an average excess return of +32.7% when stocks fell by 15% or more*.
*Source: PGIM Investments using data from Morningstar as of 4/8/2025. Stocks: S&P 500 Index. Bonds: Bloomberg U.S. Aggregate Bond Index. Historical performance based on cumulative returns. Past performance does not guarantee future results. Diversification does not protect against losses in a declining market.
The views expressed herein are those of PGIM Investments professionals at the time the comments were made and may not be reflective of their current opinions and are subject to change without notice. Neither the information contained herein nor any opinion expressed shall be construed to constitute an offer to sell or a solicitation to buy any security.
Certain information in this commentary has been obtained from sources believed to be reliable as of the date presented; however, we cannot guarantee the accuracy of such information, assure its completeness, or warrant such information will not be changed. The information contained herein is current as of the date of issuance (or such earlier date as referenced herein) and is subject to change without notice. The manager has no obligation to update any or all such information, nor do we make any express or implied warranties or representations as to the completeness or accuracy. Any projections or forecasts presented herein are subject to change without notice. Actual data will vary and may not be reflected here. Projections and forecasts are subject to high levels of uncertainty. Accordingly, any projections or forecasts should be viewed as merely representative of a broad range of possible outcomes. Projections or forecasts are estimated, based on assumptions, subject to significant revision, and may change materially as economic and market conditions change.
This material is being provided for informational or educational purposes only and does not take into account the investment objectives or financial situation of any client or prospective clients. The information is not intended as investment advice and is not a recommendation. Clients seeking information regarding their particular investment needs should contact their financial professional.
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