Chart of the month: Stocks and bonds

  • 09 August 2020
  • 5 mins reading time

Stocks and bonds are following different paths as a result of the lockdown.

Data shown: The change in prices since 2015 of the S&P 500 and the FTSE All Share stock indices; the change in yields since 2015 on the 10-year bonds issued by the US and the UK governments. Source: Schroders Personal Wealth/ Bloomberg, 6 August 2020 . All four data sets have been rebased to 100 at start to show the relative performance since then. Past performance is not a reliable indicator of future performance.

This chart shows how major stocks and bonds have performed over the past five years.

The pandemic and associated lockdown led to sharp declines in stock prices and bond yields in early 2020. While bond yields remain low, stock prices have staged a recovery with US technology companies leading the S&P 500 close to the record high it set in February of this year.

These moves reflect the effects of financial stimulus which help to see companies and households through the tough times, but also drive the prices of bonds further up and their yields down.

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In preparing this article we may have used third party sources which we believe to be true and accurate as at the date of writing. However, we can give no assurances or warranty regarding the accuracy, currency or applicability of any of the content in relation to specific situations and particular circumstances.

Forecasts of future performance are not a reliable guide to actual results in the future; neither is past performance a reliable indicator of future results. The value of investments, and the income from them, may fall as well as rise and cannot be guaranteed and the investor might not get back their initial investment.

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