Bonds have historically offered positive returns during monetary easing cycles, highlighting fixed income’s ability to offset equity market risk.
After the past seven tightening cycles, following the first rate cut, bonds delivered 68% of the return of stocks with only 27% of the volatility and more consistency in their range of outcomes.1
1Source: Morningstar, Bloomberg, S&P. Bonds represented by Bloomberg U.S. Aggregate Bond Index and stocks represented by S&P 500 Index. Average annualized returns three years following the first rate cut after the past seven Fed rate hike cycles (end dates used: 8/21/1984, 9/4/1987, 2/24/1989, 2/1/1995, 5/16/2000, 6/29/2006, 12/19/2018). Past performance does not guarantee future results.
Diversification does not assure a profit or protect against loss in declining markets.
Investing involves risk. Some investments are riskier than others. The investment return and principal value will fluctuate, and shares, when sold, may be worth more or less than the original cost. Fixed income investments are subject to interest rate risk, and their value will decline as interest rates rise.
Consider a fund’s investment objectives, risks, charges, and expenses carefully before investing. The prospectus and summary prospectus contain this and other information about the fund. Contact the PGIM Investments Sales Desk at (800) 396-5501 to obtain the prospectus and summary prospectus. Read them carefully before investing.
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