Taking Stock of Bond Returns in 2021

Canada’s bond index had its best performance in six years bolstered by the most extraordinary central bank measures in history to combat the COVID-19 pandemic. This stimulus and other supports not only pushed down yields, but also caused spreads to recover rapidly from their widest levels at the onset of the pandemic. But credit performance was concentrated in the short- and mid- areas of the curve, leaving the long end to meaningfully underperform.