April 2022 Performance
Shorter- and longer-term interest rates in developed markets moved higher in April. The broad increase in rates reflected a progressing inflationary environment stemming from hot headline inflation, the impact of the pandemic and the ongoing Russia-Ukraine conflict. Global equities declined and fixed income underperformed, as the abrupt lift-off in rates prompted markets to adjust to new valuations. The U.S. dollar surged to a recent high on the back of aggressive U.S. rate hike forecasts, and commodity prices remained at elevated levels supported by supply dislocations.
In Singapore, the MAS raised the core inflation forecast for 2022 and adopted a tighter monetary policy to slow inflation momentum and maintain price stability. The iBoxx Singapore Dollar (SGD) Overall Index fell 0.76% in April, after the worst monthly loss of -3.03% since inception over the preceding month.
All investment grade (IG) subindices fell in the red, with the A sector registering the best performance and the BBB sector the worst. In general, SGD IG bonds endured losses across the curve and faced sharp declines in longer-dated maturity buckets.
With lower duration and higher yield, the non-sovereigns sub-index outperformed both the overall index and government subindex. Temasek and LTA bonds had the longest duration among the worst performers.
By the end of the month, the overall index offered a yield of 2.83% with a duration of 6.93 years.
