(Bloomberg News) The biggest bond gains in almost a decade have pushed returns on Treasuries above stocks over the past 30 years, the first time that's happened since before the Civil War.

Fixed-income investments advanced 6.25 percent this year, almost triple the 2.18 percent rise in the Standard & Poor's 500 Index through last week, according to Bank of America Merrill Lynch indexes. Debt markets are on track to return 7.63 percent this year, the most since 2002, the data show. Long-term government bonds have gained 11.5 percent a year on average over the past three decades, beating the 10.8 percent increase in the S&P 500, said Jim Bianco, president of Bianco Research in Chicago.

The combination of a core U.S. inflation rate that has averaged 1.5 percent this year, the Federal Reserve's decision to keep its target interest rate for overnight loans between banks near zero through 2013, slower economic growth and the highest savings rate since the global credit crisis have made bonds the best assets to own this year. Not only have bonds knocked stocks from their perch as the dominant long-term investment, their returns proved everyone from Bill Gross to Meredith Whitney and Nassim Nicholas Taleb wrong.

"The generation-long outperformance of bonds over stocks has been the biggest investment theme that everyone has just gotten plain wrong," Bianco said in an Oct. 26 telephone interview. "It's such an ingrained idea in everyone's head that such low yields should be shunned in favor of stocks, that no one wants to disrupt the idea, never mind the fact that it has been off."

Stocks had risen more than bonds over every 30-year period from 1861, according to Jeremy Siegel, a finance professor at the University of Pennsylvania's Wharton School in Philadelphia, until the period ending in Sept 30.

U.S. government debt is up 7.23 percent this year, according to Bank of America Merrill Lynch's U.S Master Treasury index. Municipal securities have returned 8.17 percent, corporate notes have gained 6.24 percent and mortgage bonds have risen 5.11 percent. The S&P GSCI index of 24 commodities has returned 0.25 percent.

While 10-year Treasury yields rose 10 basis points, or 0.10 percentage point, last week to 2.32 percent, they are down from this year's high of 3.77 percent on Feb. 9. The price of the benchmark 2.125 percent note due August 2021 fell 27/32, or $8.44 per $1,000 face value, in the five days ended Oct. 28 to 98 10/32, according to Bloomberg Bond Trader data.

The yield dropped 11 basis points today to 2.21 percent at 10:21 a.m. in New York.

The shift to debt wasn't anticipated by Gross, who as co- chief investment officer of Newport Beach, California-based Pacific Investment Management Co. runs the world's biggest bond fund. His $242 billion Total Return Fund, which unloaded Treasuries in February before the rally, has gained 2.55 percent this year, putting it in the bottom 18th percentile of similar funds, according to data compiled by Bloomberg.

Whitney, a banking analyst who correctly turned bearish on Citigroup Inc. in 2007, predicted in December "hundreds of billions of dollars" of municipal defaults that haven't happened. Taleb, author of "The Black Swan" and a principal at Universa Investments LP, said at a conference in Moscow on Feb. 3 that the "first thing" investors should avoid is Treasuries.