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High-yielding cash is attractive, but its appeal may be waning

Investor Resources

Cash has historically underperformed other fixed income asset classes after the Federal Reserve stops raising interest rates, especially when you consider the effects of inflation.
Historically, even the most generous CD rates have often been outpaced by other investments.
Not all fixed-income asset classes react the same way to economic and interest-rate changes.
There can be a downside to playing it "safe" if your assets are in investments that don't keep pace with inflation.
History shows fixed-income returns have been resilient after negative years.
Generous yields on cash typically don't last for very long.

Market Perspectives

Cash has become more appealing due to higher interest rates. But while it clearly has merits, there are also drawbacks.
Active fixed-income approaches have historically outperformed their passive counterparts and may add value by aligning with an investor’s objectives.
Yields? Distributions? Yield-to-Worst? What you emphasize depends on what clients want from a bond fund.
Investors are finally getting paid for holding cash, but there are risks in holding too much of it.
Waiting too long to rotate from cash into bonds could significantly diminish your returns.
OVERALL
(as of 8/31/2024)
Overall, 4 stars, 3-Year, 3 stars, 5-Year, 4 stars, and 10-Year, 4 stars, rated against 556, 556, 521 and 372 products, respectively. Morningstar RatingTM is calculated for products with at least a 3-year history, based on a risk-adjusted return measure (excluding any applicable sale charges) and accounts for variations in a product's monthly performance. 5 stars are assigned to the top 10%; 4 stars to the next 22.5%, 3 stars to the next 35%, 2 stars to the next 22.5% and 1 star to the bottom 10%. ETFs and mutual funds are considered a single population. The Overall Rating is derived from a weighted average of the performance figures associated with its 3-, 5-, and 10-year (if applicable) Morningstar Rating metrics. For more information about these ratings, including their methodology, please go to global.morningstar.com/managerdisclosures . Ratings for other share classes may vary and are subject to change monthly. Past performance is no guarantee of future performance.
©2024 Morningstar, Inc. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/ or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.

556 Products | Intermediate Core-Plus Bond Category
Based on Risk-Adjusted Returns
OVERALL
(as of 8/31/2024)
Overall, 5 stars, 3-Year, 5 stars, 5-Year, 5 stars, and 10-Year, 5 stars, rated against 413, 413, 372 and 265 products, respectively. Morningstar RatingTM is calculated for products with at least a 3-year history, based on a risk-adjusted return measure (excluding any applicable sale charges) and accounts for variations in a product's monthly performance. 5 stars are assigned to the top 10%; 4 stars to the next 22.5%, 3 stars to the next 35%, 2 stars to the next 22.5% and 1 star to the bottom 10%. ETFs and mutual funds are considered a single population. The Overall Rating is derived from a weighted average of the performance figures associated with its 3-, 5-, and 10-year (if applicable) Morningstar Rating metrics. For more information about these ratings, including their methodology, please go to global.morningstar.com/managerdisclosures . Ratings for other share classes may vary and are subject to change monthly. Past performance is no guarantee of future performance.
©2024 Morningstar, Inc. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/ or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.

413 Products | Intermediate Core Bond Category
Based on Risk-Adjusted Returns
OVERALL
(as of 8/31/2024)
Overall, 4 stars, 3-Year, 3 stars, 5-Year, 4 stars, and 10-Year, 4 stars, rated against 322, 322, 270 and 188 products, respectively. Morningstar RatingTM is calculated for products with at least a 3-year history, based on a risk-adjusted return measure (excluding any applicable sale charges) and accounts for variations in a product's monthly performance. 5 stars are assigned to the top 10%; 4 stars to the next 22.5%, 3 stars to the next 35%, 2 stars to the next 22.5% and 1 star to the bottom 10%. ETFs and mutual funds are considered a single population. The Overall Rating is derived from a weighted average of the performance figures associated with its 3-, 5-, and 10-year (if applicable) Morningstar Rating metrics. For more information about these ratings, including their methodology, please go to global.morningstar.com/managerdisclosures . Ratings for other share classes may vary and are subject to change monthly. Past performance is no guarantee of future performance.
©2024 Morningstar, Inc. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/ or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.

322 Products | Multisector Bond Category
Based on Risk-Adjusted Returns
OVERALL
(as of 8/31/2024)
Overall, 4 stars, 3-Year, 4 stars, 5-Year, 3 stars, and 10-Year, 5 stars, rated against 438, 438, 402 and 300 products, respectively. Morningstar RatingTM is calculated for products with at least a 3-year history, based on a risk-adjusted return measure (excluding any applicable sale charges) and accounts for variations in a product's monthly performance. 5 stars are assigned to the top 10%; 4 stars to the next 22.5%, 3 stars to the next 35%, 2 stars to the next 22.5% and 1 star to the bottom 10%. ETFs and mutual funds are considered a single population. The Overall Rating is derived from a weighted average of the performance figures associated with its 3-, 5-, and 10-year (if applicable) Morningstar Rating metrics. For more information about these ratings, including their methodology, please go to global.morningstar.com/managerdisclosures . Ratings for other share classes may vary and are subject to change monthly. Past performance is no guarantee of future performance.
©2024 Morningstar, Inc. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/ or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.

438 Products | Moderately Conservative Allocation Category
Based on Risk-Adjusted Returns
OVERALL
(as of 8/31/2024)
Overall, 4 stars, 3-Year, 3 stars, 5-Year, 4 stars, and 10-Year, 5 stars, rated against 1089, 1089, 1036 and 810 products, respectively. Morningstar RatingTM is calculated for products with at least a 3-year history, based on a risk-adjusted return measure (excluding any applicable sale charges) and accounts for variations in a product's monthly performance. 5 stars are assigned to the top 10%; 4 stars to the next 22.5%, 3 stars to the next 35%, 2 stars to the next 22.5% and 1 star to the bottom 10%. ETFs and mutual funds are considered a single population. The Overall Rating is derived from a weighted average of the performance figures associated with its 3-, 5-, and 10-year (if applicable) Morningstar Rating metrics. For more information about these ratings, including their methodology, please go to global.morningstar.com/managerdisclosures . Ratings for other share classes may vary and are subject to change monthly. Past performance is no guarantee of future performance.
©2024 Morningstar, Inc. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/ or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.

1089 Products | Large Value Category
Based on Risk-Adjusted Returns
3077284