With interest rates beginning what will probably be a protracted rise, bond investors are braced for a bearish trend. They are taking for granted that returns will be bad, leaving just two important questions: How bad will returns be? And in which sectors will returns be the least bad?
Some phrase the first question differently, asking: “Is this 1994 all over again?” That was the worst bond year in memory. By Merrill Lynch’s measure, 10-year Treasuries returned -8.29%. Bonds hardly lived up t