Why have RRBs and RRB mutual funds done so well recently?
Following the burst of the equity markets bubble in 2000, many investors fled to the relative safety of the bond markets. This drove up bond prices and made it possible for RRBs to achieve double-digit annual returns. Like all trends this cannot continue indefinitely. RRB prices will very likely correct as equity markets recover. If you buy RRBs, make sure that the current real yield-to-maturity meets your needs and plan to hold them until maturity.
