It’s easy to assume that bond investors had a tough 2013, but it’s more complicated than that. Bonds got hammered, that’s true, but not all bonds are created equal. If you were careful about which part of the bond market you played in, you might have done o.k. Here’s a list of the most popular bond ETFs, ranked in order of their 2013 returns.
As you can see from the table, high yield corporate bonds was the best place to be if you were a bond investor. And the bond managers I talk to say that 2014 is shaping up to be another good year for this end of the market. Some investors need to have exposure to bonds, so it makes sense to choose your ETFs carefully.