At a glance
- The fund's yield to maturity was 4.94% and its duration about 7.0 years as of Oct. 31, 2026.
- For advisors setting duration in client bond sleeves, a 1-point rise in yields now costs 1.73% instead of nearly 7%.
- Bond investors in all but one of the leading bond indexes lost money after inflation over the trailing 10 years, the report said.
Bond investors now face about 10.5 percentage points more potential upside than downside, Morningstar — Financial Advice reported, using the iShares 7-10 Year Treasury ETF (IEF) as its example.
The fund's yield to maturity was 4.94% and its duration about 7.0 years as of Oct. 31, 2026. The report describes yields as the highest in a decade, with duration drifting down from its covid-period peak. A 1-point decline in yields would produce a 12.18% total return, the report estimates, while a 1-point rise would cost 1.73%.
For advisors setting duration in client bond sleeves, a 1-point rise in yields now costs 1.73% instead of nearly 7%. On July 31, 2020, the same ETF yielded 0.47% with duration near 8.0 years, leaving 1.6 points between its potential upside of 8.5% and potential loss of 6.9%.
Bond investors in all but one of the leading bond indexes lost money after inflation over the trailing 10 years, the report said.
Upside grew while downside shrank
Total return from a 1-point move in yields, iShares 7-10 Year Treasury ETF, Jul. 2020 vs. Oct. 2026
- Jul 2020
- Oct 2026
- Upside if yields fall 1 pt8.5% → 12.18%
- Downside if yields rise 1 pt6.9% → 1.73%
Show as table
| Item | Jul 2020 | Oct 2026 | Change |
|---|---|---|---|
| Upside if yields fall 1 pt | 8.5% | 12.18% | +3.68% |
| Downside if yields rise 1 pt | 6.9% | 1.73% | −5.17% |
Reported by the Products & portfolios desk from Morningstar — Financial Advice. Published . Corrections