The Year in Bond Funds by Morningstar Investment Research 
 

“Prediction is very difficult, especially about the future.” –- Niels Bohr. 

Coming into 2014, prognosticators had the fixed-income markets all figured out. Many posited that it would be a rough year for U.S. Treasuries and other rate-sensitive bonds as the Fed unwound its bond-buying program. Meanwhile, riskier assets, including junk bonds and bank loans, seemed poised to outperform against the backdrop of manageable corporate-debt levels, decent economic growth, and strong investor appetite. Munis were a trouble spot amid bad news out of Detroit and Puerto Rico, while many thought of Russia as a relatively high-quality name in the emerging-markets arena. Finally, Bill Gross was still synonymous with PIMCO Total Return (PTTRX), which, despite some outflows the previous year, was sitting on net assets of close to $240 billion.