Journal of Investment Consulting - Volume 24, Number 1, 2025
The Expected Return of Bonds
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Investors commonly use a bond's yield to maturity as a proxy for its expected return over a holding period of around ten years, but the rationale behind this approach is worth examining carefully. This paper explores the assumptions underlying the relationship between yield to maturity and mean return, the conditions under which the proxy holds up, and evidence that supports its use in practice. It is a useful reference for investors and advisors who rely on yield to maturity as a forecasting tool and want a clearer understanding of when and why it works.
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About the Journal of Investment Consulting
The Journal of Investment Consulting is a respected, peer-reviewed academic publication that brings to life the latest empirical, graduate-level research into investment strategies, risk management, behavioral finance, applications of AI in wealth management—and more. In each issue, look for the Masters Series interview with leading visionaries in finance, economics, and investments.
