We are half way through the year and it's time to take a look at how the various fixed income asset classes have performed year to date. But as institutional investors tend to do, let's look at the performance as a function of volatility. Here is the chart, with the S&P500 and the hedge fund index thrown in for good measure.
The winners on a risk adjusted basis are preferred equities, emerging market bonds, and investment grade corporate bonds. Long term treasuries did well in terms of return but ended up being highly volatile (with this volatility likely to continue).