The authors argue higher bond yields have restored fixed income’s role in balanced portfolios after the low-yield 2010–2022 regime. The Bloomberg US Aggregate yielded 5.03% in early September, while 10-year Treasury real yields reached roughly 2.4%, improving both income potential and diversification against equity risk.
Welcome Back, Balanced Portfolio
PIMCO
Lotfi Karoui, Michael Puempel
Research
20 Pages
Key Takeaways
Yield reset matters: Bloomberg US Aggregate yielded 5.03% on September 3, 2026, giving bonds income levels PIMCO sees as supportive of medium-term returns.
Real yields recover: Ten-year Treasury real yields are roughly 2.4%, versus around -1% when the Fed began hiking in 2022.
Equity dominance lingers: Since 2010, the S&P 500 grew over eightfold nominally while the US Aggregate returned just above 2% annually through August 2026.
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