Highlights from the fixed income markets:
- The Bloomberg U.S. Aggregate Index (the Agg) ran its streak of positive absolute returns to 4 consecutive months and the 9th month out of 11 so far in 2025.
- Duration-adjusted Treasury returns finished slightly ahead of the Agg, with mortgage-backed securities (MBS) and long corporates posting the weakest excess returns.
- Investment grade corporate bond sectors produced fairly similar results as the spreads on all sectors were flat to 6 bps wider for the month.
- High yield sector spreads, in contrast, showed a larger distribution. Technology sector spreads moved wider by 34 bps, while capital goods sector spreads tightened by 63 bps – a nearly 100 bp dispersion.
- The high yield bond default rate was unchanged for the month.
- The Fed Fund futures market ended the month pricing in high odds for a 25-bps cut in December.
Market Summary
November marked another strong month for fixed income, with all major categories posting positive returns — extending the asset class’s solid run through most of 2025.
YIELDS & RETURNS (%) 1
| Duration (years) | Yield | November Return | YTD Return | |
|---|---|---|---|---|
| Treasuries | 5.97 | 3.83 | 0.62 | 6.67 |
| Investment Grade Corporates | 6.99 | 4.76 | 0.65 | 7.99 |
| High Yield Corporates | 3.06 | 6.57 | 0.58 | 8.01 |
| Municipal Bonds | 6.18 | 3.58 | 0.23 | 4.15 |
U.S. Treasury Market
Treasury yields fell broadly, with short Treasury yields dropping most and long Treasuries little changed.
TREASURY YIELDS (%) 1
| November Change | Year-to-Date Change | 2025-11-30 | 2025-10-31 | 2025-09-30 | 2025-08-31 | |
|---|---|---|---|---|---|---|
| 90-Day T-Bills | -0.02 | -0.54 | 3.79 | 3.81 | 3.94 | 4.14 |
| 2-year Treasury | -0.10 | -0.76 | 3.49 | 3.60 | 3.61 | 3.61 |
| 5-year Treasury | -0.11 | -0.79 | 3.60 | 3.71 | 3.74 | 3.69 |
| 10-year Treasury | -0.07 | -0.56 | 4.02 | 4.09 | 4.15 | 4.22 |
| 30-year Treasury | 0.00 | -0.11 | 4.67 | 4.66 | 4.73 | 4.92 |
Returns were positive across all Treasury maturities. The strongest performance, both for the month and year-to-date, came in the 10-year bucket.
TREASURY RETURNS (%) 1
| Duration (years) | November Return | YTD | |
|---|---|---|---|
| 90-Day T-Bills | 0.24 | 0.28 | 3.87 |
| 2-year Treasury | 1.95 | 0.46 | 4.61 |
| 5-year Treasury | 4.63 | 0.77 | 7.32 |
| 10-year Treasury | 8.29 | 1.04 | 8.98 |
| 30-year Treasury | 16.42 | 0.27 | 5.99 |
| U.S. Treasury TIPS | 6.64 | 0.18 | 7.44 |
Investment Grade
The Agg produced a positive absolute return while moderately underperforming Treasuries. Mortgage-backed securities and long corporates showed the weakest excess returns.
INVESTMENT GRADE INDEX & SECTOR RETURNS (%) 1
| Duration (years) | Yield | November Return | Duration adj. vs. Treasuries | YTD Return | Duration adj. vs. Treasuries | |
|---|---|---|---|---|---|---|
| U.S. Aggregate | 6.05 | 4.27 | 0.62 | -0.03 | 7.46 | 0.58 |
| Treasuries | 5.97 | 3.83 | 0.62 | 0.00 | 6.67 | 0.00 |
| Agencies | 3.87 | 3.93 | 0.61 | 0.04 | 6.05 | 0.33 |
| Mortgage-Backed Securities | 5.53 | 4.61 | 0.62 | -0.05 | 8.35 | 1.20 |
| Asset-Backed Securities | 2.88 | 4.13 | 0.56 | 0.05 | 5.61 | 0.42 |
| Intermediate Corporates | 4.18 | 4.40 | 0.71 | 0.00 | 7.73 | 1.09 |
| Long Corporates | 12.88 | 5.52 | 0.54 | -0.05 | 8.58 | 0.66 |
Investment grade (IG) spreads moved very gradually wider for the month and sit very close to unchanged on the year after hitting their multi-year tights in September.
INVESTMENT GRADE SPREADS (basis points) 1
| November Change | Year-to-Date Change | 2025-11-30 | 2025-10-31 | 2025-09-30 | 2025-08-31 | |
|---|---|---|---|---|---|---|
| 1-3 Yr Corporates | 2 | -1 | 51 | 49 | 46 | 50 |
| Intermediate Corporates | 3 | 2 | 73 | 70 | 66 | 72 |
| Long Corporates | 1 | -1 | 97 | 96 | 90 | 94 |
| MBS Current Coupon Spread | -1 | -22 | 102 | 103 | 105 | 110 |
IG returns were fairly uniform in absolute terms; in excess terms, returns were correlated with quality, as AAAs outperformed and BBBs underperformed.
INVESTMENT GRADE CORPORATE CREDIT QUALITY RETURNS (%) 1
| Duration (years) | Yield | November Return | Duration adj. vs. Treasuries | YTD Return | Duration adj. vs. Treasuries | |
|---|---|---|---|---|---|---|
| AAA | 10.40 | 4.58 | 0.80 | 0.19 | 7.52 | 0.12 |
| AA | 8.09 | 4.54 | 0.65 | 0.03 | 7.31 | 0.40 |
| A | 6.97 | 4.61 | 0.68 | 0.01 | 8.08 | 1.04 |
| BBB | 6.75 | 4.96 | 0.62 | -0.06 | 8.02 | 0.91 |
IG sector spreads were flat to moderately wider. The sectors that remained flat were consumer non-cyclicals and communications, while the sector with the most widening was basic industrials.
INVESTMENT GRADE CORPORATE BOND SPREADS BY SECTOR (basis points) 1
| November Change | YTD Change | 2025-11-30 | 2025-10-31 | 2025-09-30 | 2025-08-31 | |
|---|---|---|---|---|---|---|
| Consumer Non-Cyclical | 0 | -3 | 70 | 70 | 67 | 72 |
| Technology | 4 | 11 | 76 | 72 | 62 | 66 |
| Energy | 1 | 2 | 94 | 93 | 89 | 96 |
| Consumer Cyclical | 1 | 4 | 75 | 74 | 71 | 77 |
| Transportation | 1 | 1 | 76 | 75 | 71 | 76 |
| Basic Industry | 6 | 0 | 93 | 87 | 84 | 88 |
| Communications | 0 | 0 | 97 | 97 | 86 | 90 |
| Capital Goods | 3 | -5 | 67 | 64 | 62 | 67 |
| Utilities | 4 | 6 | 88 | 84 | 81 | 86 |
| Financials | 2 | -2 | 80 | 78 | 74 | 80 |
High Yield
High yield (HY) returns were mixed, with a preference for higher quality. The strongest absolute and excess returns came from single Bs, while CCCs posted losses in both absolute and excess terms.
HIGH YIELD SECTOR RETURNS (%) 1
| Duration (years) | Yield | November Return | Duration adj. vs. Treasuries | YTD Return | Duration adj. vs. Treasuries | |
|---|---|---|---|---|---|---|
| High Yield Corporates | 3.06 | 6.57 | 0.58 | 0.00 | 8.01 | 2.17 |
| BB | 3.31 | 5.51 | 0.66 | 0.06 | 8.58 | 2.57 |
| B | 2.78 | 6.66 | 0.74 | 0.18 | 7.49 | 1.82 |
| CCC | 2.74 | 9.93 | -0.19 | -0.74 | 7.55 | 1.88 |
HIGH YIELD OPTION-ADJUSTED SPREADS (OAS) (basis points) 1
| Monthly Change | YTD Change | 2025-11-30 | 2025-10-31 | 2025-09-30 | 2025-08-31 | |
|---|---|---|---|---|---|---|
| High Yield OAS | -12 | -18 | 269 | 281 | 267 | 272 |
| BB OAS | -10 | -18 | 161 | 171 | 168 | 170 |
| B OAS | -12 | -3 | 274 | 286 | 263 | 266 |
| CCC OAS | 14 | 67 | 625 | 611 | 604 | 617 |
HY spreads were mixed, with a nearly 100-bp dispersion between the strongest and weakest sectors. HY bonds in the capital goods sector tightened by 63 bps, while technology spreads widened by 34 bps.
HIGH YIELD CORPORATE BOND SPREADS (OAS) BY SECTOR (basis points) 1
| November Change | YTD Change | 2025-11-30 | 2025-10-31 | 2025-09-30 | 2025-08-31 | |
|---|---|---|---|---|---|---|
| Consumer Non-Cyclical | -13 | -74 | 233 | 246 | 259 | 266 |
| Technology | 34 | 66 | 330 | 296 | 273 | 269 |
| Energy | -27 | 14 | 264 | 291 | 268 | 291 |
| Consumer Cyclical | -4 | 15 | 265 | 269 | 253 | 250 |
| Transportation | -26 | 79 | 371 | 397 | 353 | 376 |
| Basic Industry | -12 | 42 | 298 | 310 | 276 | 278 |
| Communications | 5 | -106 | 355 | 350 | 343 | 360 |
| Capital Goods | -63 | -34 | 209 | 272 | 249 | 241 |
| Utilities | -32 | -66 | 127 | 159 | 159 | 163 |
| Financials | -13 | -16 | 225 | 238 | 224 | 224 |
High yield defaults in the trailing 12 months remained stable month-over-month.
HIGH YIELD DEFAULT RATES 2
| November Change | YTD Change | 2025-11-30 | 2025-10-31 | 2025-09-30 | 2025-08-31 | |
|---|---|---|---|---|---|---|
| Number of Issuers in Default | 0 | -4 | 16 | 16 | 18 | 20 |
| Issuer Default Rate | 0.0% | -0.5% | 2.1% | 2.1% | 2.4% | 2.6% |
Municipals & Other
Municipal bond returns were positive in November, with short- and intermediate-duration munis outpacing long-duration munis. Yields moved generally lower on the short end of the muni curve, and slightly wider on the long end.
MAJOR MUNICIPAL BOND INDEX RETURNS (%) 1
| YTW | Duration (years) | November Return | YTD Return | |
|---|---|---|---|---|
| Short Duration (1-5 Years) | 2.82 | 2.74 | 0.24 | 4.02 |
| Intermediate (1-15 Years) | 3.16 | 4.68 | 0.27 | 4.89 |
| Long Duration (22+ Years) | 4.51 | 9.45 | 0.12 | 2.28 |
MUNICIPAL YIELDS BY RATING CATEGORY AND MATURITY (%) 1
| AAA | AA | A | BBB | |||||
|---|---|---|---|---|---|---|---|---|
| 11/30 | 10/30 | 11/30 | 10/30 | 11/30 | 10/30 | 11/30 | 10/30 | |
| 1 Year | 2.50 | 2.52 | 2.63 | 2.68 | 2.90 | 2.94 | 3.96 | 3.77 |
| 5 Year | 2.38 | 2.37 | 2.54 | 2.55 | 2.82 | 2.79 | 3.77 | 3.77 |
| 10 Year | 2.72 | 2.72 | 2.90 | 2.91 | 3.20 | 3.11 | 4.21 | 4.18 |
| 30 Year | 4.05 | 4.06 | 4.39 | 4.38 | 4.63 | 4.61 | 5.69 | 5.64 |
AA MUNICIPALS – HYPOTHETICAL AFTER-TAX YIELDS BY EFFECTIVE TAX RATE (%) 3
| 35% | 30% | 25% | 20% | |
|---|---|---|---|---|
| 1 Year | 4.04 | 3.75 | 3.50 | 3.28 |
| 5 Year | 3.92 | 3.64 | 3.39 | 3.18 |
| 10 Year | 4.47 | 4.15 | 3.87 | 3.63 |
| 30 Year | 6.75 | 6.27 | 5.85 | 5.49 |
Returns were mixed among the other / miscellaneous fixed income categories. Convertibles were weak in an otherwise very strong year. Emerging markets posted positive absolute returns while underperforming Treasuries.
OTHER SECTOR RETURNS (%) 1,4
| Duration (years) | Yield | November Return | Duration adj. vs. Treasuries | YTD Return | Duration adj. vs. Treasuries | |
|---|---|---|---|---|---|---|
| Emerging Markets | 5.20 | 7.30 | 0.45 | -0.22 | 12.22 | 5.55 |
| Global Treasuries (Unhedged) | 7.00 | 3.08 | -0.01 | 0.07 | 6.69 | 0.41 |
| S&P/LSTA Leveraged Loan 100 | 7.30 | 0.45 | 6.26 | |||
| Wells Fargo Hybrid & Pref. Securities Aggregate Index | 6.85 | -0.96 | -2.43 | |||
| U.S. Convertibles | 1.45 | 1.00 | -2.15 | 18.79 |
Bond Rating Categories
Standard & Poor’s Ratings Group
AAA An obligation rated “AAA” has the highest rating assigned by Standard & Poor's. The obligor's capacity to meet its financial commitment on the obligation is extremely strong.
AA An obligation rated “AA” differs from the highest rated obligations only in small degree. The obligor’s capacity to meet its financial commitment on the obligation is very strong.
A An obligation rated “A” is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher- rated categories. However, the obligor’s capacity to meet its financial commitment on the obligation is still strong.
BBB An obligation rated “BBB” exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation.
Obligations rated “BB,” “B,” “CCC,” “CC” and “C” are regarded as having significant speculative characteristics. "BB" indicates the least degree of speculation and “C” the highest. While such obligations will likely have some quality and protective characteristics, these may be outweighed by large uncertainties or major exposures to adverse conditions.
BB An obligation rated “BB” is less vulnerable to nonpayment than other speculative issues. However, it faces major ongoing uncertainties or exposure to adverse business, financial or economic conditions which could lead to the obligor’s inadequate capacity to meet its financial commitment on the obligation.
B An obligation rated “B” is more vulnerable to nonpayment than obligations rated “BB,” but the obligor currently has the capacity to meet its financial commitment on the obligation. Adverse business, financial or economic conditions will likely impair the obligor's capacity or willingness to meet its financial commitment on the obligation.
CCC An obligation rated “CCC” is currently vulnerable to nonpayment and is dependent upon favorable business, financial and economic conditions for the obligor to meet its financial commitment on the obligation. In the event of adverse business, financial, or economic conditions, the obligor is not likely to have the capacity to meet its financial commitment on the obligation.
CC An obligation rated “CC” is currently highly vulnerable to nonpayment.
C A subordinated debt obligation rated “C” is currently highly vulnerable to nonpayment. The “C” rating may be used to cover a situation where a bankruptcy petition has been filed or similar action taken, but payments on this obligation are being continued.
D An obligation rated “D” is in payment default. The “D” rating category is used when payments on an obligation are not made on the date due even if the applicable grace period has not expired, unless Standard & Poor's believes that such payment will be made during such grace period. The “D” rating also will be used upon the filing of a bankruptcy petition or the taking of a similar action if payments on an obligation are jeopardized.
For educational purposes only. This update provides an overview of certain broad-based Fixed Income benchmarks and does not include performance of the CI Segall Bryant & Hamill Asset Management, (“Segall Bryant & Hamill”) Fixed Income styles. Past performance cannot guarantee future results. All investments involve risk, including the possible loss of capital. One cannot invest directly in an index. All opinions expressed in this material are solely the opinions of Segall Bryant & Hamill. You should not treat any opinion expressed as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of the manager’s opinions. The opinions expressed are based upon information the manager considers reliable, but completeness or accuracy is not warranted, and it should not be relied upon as such. Market conditions are subject to change at any time, and no forecast can be guaranteed. Any and all information perceived from this material does not constitute financial, legal, tax or other professional advice and is not intended as a substitute for consultation with a qualified professional. The manager’s statements and opinions are subject to change without notice, and Segall Bryant & Hamill is not under any obligation to update or correct any information provided in this material. Advisory services are offered through Segall Bryant and Hamill LLC, a registered investment adviser (“RIA”) with the U.S. Securities and Exchange Commission (“SEC”).
1 Source: Bloomberg.
2 Source: Bank of America Merrill Lynch.
3 Hypothetical yields are calculated as the AA municipal yield divided by (1-tax rate). Actual tax-adjusted yields will depend on individual tax circumstances.
4 Source: Standard & Poor’s.
