2013 has been a somewhat volatile year for the fixed income market, as investors weighed the current low interest environment with the possibility of the Federal Reserve tapering its bond buying purchases, which it announced last week it was finally going to begin doing. As a result, most bond exchange-traded products struggled to keep up with the equity market’s quick pace, with many funds ending in the red in 2013 [see The Most Successful New ETFs of 2013].
There were, however, some bright spots in the space, including the SPDR Barclays Capital Convertible Bond ETF (CWB) and the US Treasury Steepener ETN (STPP).
Longer-dated Treasury bond funds took the biggest hit in 2013, including the 25+ Year Zero Coupon U.S. Treasury Index Fund (ZROZ) and the Extended Duration Treasury ETF (EDV).
Not surprisingly, several emerging market bond ETPs also found themselves at the bottom of the barrel.
Below, we highlight 2013’s best and worst bond ETP performers (as of December 20, 2013):
2013's Best Performing Bond ETFs
• SPDR Barclays Capital Convertible Securities ETF (CWB): 19.42%
• iPath US Treasury Steepener ETN (STPP): 16.88%
• iShares Global ex USD High Yield Corp Bond ETF (HYXU): 11.31%
• AdvisorShares Peritus High Yield ETF (HYLD): 11.24%
• Guggenheim BulletShares 2018 High Yield Corporate Bond ETF (BDJI): 7.80%
• PowerShares DB Italian Treasury Bond Futures Exchange Traded Notes (ITLY): 7.77%
• iShares B - Ca Rated Corporate Bond ETF (QLTC): 7:60%
• PIMCO 0-5 Year High Yield Corporate Bond Index ETF (HYS): 7.24%
• Guggenheim BulletShares 2016 High Yield Corporate Bond ETF (BSJG): 7:16%
• iShares Global High Yield Corporate Bond ETF (GHYG): 6.91%
2013's Worst Performing Bond ETFs
• PIMCO 25+ Year Zero Coupon U.S. Treasury Index ETF (ZROZ): -18.77%
• Vanguard Extended Duration Treasury Index ETF (EDV):
• PIMCO 15+ Year US TIPS Index ETF (LTPZ): -18.04%
• PIMCO Australia Bond Index ETF (AUD): -13.72%
• WisdomTree Australia & New Zealand Debt Fund (AUNZ):
• Market Vectors CEF Municipal Income ETF (XMPT): -12.32%
• iPath US Treasury Long Bond Bull ETN (DLBL): -12.10%
• PIMCO Global Advantage Inflation-Linked Bond Exchange-Traded Fund (ILB): -12.00%
• iShares 20+ Year Treasury Bond ETF (TLT): -11.63%
• Vanguard Long-Term Government Bond ETF (VGLT):
Daniela Pylypczak writes for ETFdb, which offers a comprehensive and original ETF database and analytical consulting services for advisors and investors, as well as a free newsletter. Learn more about their services by visiting ETFdb.com. Disclosure: the author had no positions in the securities named in this article at the time of writing.