Q4 2024 Investment Review

By Mark Anderson | January 29, 2025

The Fourth Quarter 2024 Investment Review highlights the bond market's low single-digit gains despite a challenging final quarter. ​ The Bloomberg Aggregate Index lost 3.06% in Q4, ending the year up 1.25%. ​ Duration impacted performance, but CMBS and ABS sectors performed well. ​ Persistent inflation and policy uncertainty were key challenges. ​

Bond yields rose after the Fed cut rates, with 2-year yields up 60bps to 4.25% and 10-year yields up 79bps to 4.57%. ​ Corporate bond spreads rebounded, supported by high corporate margins and strong demand. ​ The labor market moderated, adding around 200k jobs monthly, while consumer optimism remained high, reflected in retail sales growth. ​

For Q1 2025, NIS remains cautious on spread levels but sees opportunities in longer-duration corporate credit due to steepening yield curves and higher Treasury yields. ​ The ABS sector remains positive, with strong demand for new issues. ​ NIS prefers experienced, liquid issuers and finds structured products relatively cheap. ​

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NIS Investment review - Q4 2024
Mark Anderson

Mark Anderson

Mark R. Anderson is the Chief Strategy Officer at National Investment Services. He is a member of the fixed income investment, management and equity investment committees.

Posted in Quarterly Review