February 2, 2026
By Matthew Vegari, Head of Research
[To coincide with the FOMC meeting, last week the Research Desk covered short rates and cash exposures across a variety of institutional investors. This week, we’re taking a look at long rates to explore how fixed income portfolios have evolved and where they’re heading in 2026.]
As noted by economists far and wide, a new macroeconomic regime surfaced in the wake of the COVID pandemic and upended paradigms of the 2010s: Inflation flipped from too low to too high; monetary policy shifted from accommodative to restrictive; long rates rose from 1- and 2-handles to 3- and 4-handles. For bondholders especially, this adjustment period stung.
What once looked like a temporary credit environment, termed “higher for longer,” is now here to stay. Yet what does “higher for longer” actually mean for investors? How are they positioning their portfolios?
To gauge how strategies have evolved, the Research Desk leveraged its proprietary database and analyzed the fixed income holdings of a sample of private wealth clients. For these asset owners—chiefly family offices and ultra-high net worth individuals—recent patterns are clear: As the rate regime has matured and filtered through capital markets, investors have reembraced duration and shifted farther out on the yield curve.
In 2019, the 10-year US Treasury yield averaged 2.1%. Today, that figure has doubled. This transition was neither incremental nor linear; the path to higher rates was a tortuous one: yields plummeted during the pandemic, only to soar amid an ensuing inflation battle. We can split this recent history into four distinct periods:
Where is our proof of tactical extension today? While the line for duration can be blurred (is duration rising because of active portfolio positioning or bond market gyrations?), time to maturity for fixed income investments is unambiguous. The Research Desk looked at the typical maturity on fixed income assets held by our private wealth sample: For the past 18+ months, investors have been buying up bonds farther out on the curve.
In the old regime, portfolios allocated just 26% of their fixed income to the long end of the curve (10+ years time to maturity). Today, that distribution has flipped; long-end holdings have surged to 39%. Today, the average across all fixed income investments is 9.8 years, up from 6.9 years in 2019. This reallocation is unmistakable. Private wealth investors have deliberately rotated out of shorter-dated bonds to lock in higher yields. They’re building portfolios around a new regime.
Plotting duration against yield across all four periods crystallizes the journey. The old regime and COVID interlude trace the classic inverse path—lower yields, higher duration. The rates reset period shows the compression and volatility as markets repriced. But today’s regime tells a different story: Duration is climbing even as yields remain elevated. The pattern has broken because the investor mindset has shifted. Given a structural floor for the 10-year—as discussed in our 2026 outlook—we expect investors to continue shifting farther out on the curve in 2026.
Additional research by Tyler Busby, Data Scientist