Eight of the largest US bond fund managers, collectively overseeing nearly $700 billion, are limiting large macro bets as Treasury yields rise on inflation and deficit concerns, corporate bond valuations look stretched and AI-related issuance expands. Vanguard's Arvind Narayan said investors should be selective and conservative, favoring high-quality short-dated assets. The Bloomberg Aggregate Index has fallen 1% this year, its worst performance since 2022, although most active managers are beating the benchmark while remaining negative year to date. Managers including PIMCO's Dan Ivascyn, PGIM's Greg Peters, Fidelity's Julian Potenza, Capital Group's Pramod Atluri, JPMorgan Asset Management's Ed Fitzpatrick, BlackRock's Russell Brownback and Baird Asset Management's Warren Pierson are emphasizing security selection, higher-quality credit, mortgages and shorter maturities. Rising yields provide more income to offset price declines, while the benchmark 10-year Treasury yield remains around 5%.