But while equities may have dazzled investors with their strong rally, not all areas of fixed income struggled.

Perhaps unsurprisingly, the IMA Sterling High Yield sector was the best performing of the seven bond-only sectors in the IMA universe, while global emerging market bonds was the worst. In 2013, funds in the High Yield sector produced an average of 6.98 per cent, more than four percentage points higher than its closest rival the IMA Sterling Strategic Bond sector, with an average return of 2.76 per cent.

Within the High Yield sector, however, performance varied significantly, with the best-performing fund, the £125.6m Invesco Perpetual High Yield vehicle run by Paul Causer and Paul Read, delivering a return in 2013 of 9.42 per cent.Meanwhile, at the opposite end the £171.2m Investec Monthly High Income fund managed by Kieran Roane and John Stopford produced a return of 3.29 per cent.

Interestingly, however, while High Yield was the fixed income sector with the best average, if the best five performers are taken from each of the seven bond sectors in 2013, the top 10 of these are actually split 50:50 from the Global Bonds and Sterling Strategic Bond sectors.

The best bond fund overall in 2013, according to FE data, was the €164.6m (£135.9m) GAM Star Credit Opportunities, managed by Anthony Smouha from Atlanticomnium and which sits in the Global Bonds sector. This delivered a return of 18.95 per cent. Meanwhile, the PFS TwentyFour Focus Bond, the 10th best performing fund, recorded a return of 10.15 per cent, higher than the best vehicle in the high-yield sector.

In contrast, the Global Emerging Markets Bond sector – introduced in January 2014 – recorded an average loss of 9.42 per cent in 2013. None of the 24 funds in the sector recorded a positive return last year, with the best of the bunch, the Pimco GIS Emerging Markets Corporate Bond, recording a loss of 2.08 per cent.

The first few weeks of 2014 have not seen the sector fare much better, although for the year to date to February 19 four of the funds had produced a positive return, with the Pimco fund again topping the table with a return of 1.08 per cent.

Elsewhere within the fixed income universe, as equity markets remain strong and the threat of US tapering continues to hang over investors, the best-performing fixed income sectors for the year- to-date to February 19 have been IMA UK Gilts and IMA Sterling Corporate Bonds, which have shown average returns of 2.16 per cent and 2.02 per cent respectively.

UK Gilt funds have performed well in the improving economic environment.Ignoring funds related to annuity rates, the best return in this sector for 2014 year-to-date has been the £100.3m Schroder Institutional Long Dated Sterling Bond fund with a return of 3.23 per cent.

Meanwhile, among the Sterling Corporate Bond sector, the best return came from the F&C Institutional Long Dated Corporate Bond with a return of 3.17 per cent. In addition –unlike in 2013 – the 10 best bond funds across the seven sectors included four from the UK Gilts sector, five from the Sterling Corporate Bond sector and just one from the Strategic Bond peer group in the form of the Axa Sterling Long Bond.

This suggests that investors taking risk off the table and moving to the more defensive end of fixed income could be seeing the benefit in terms of returns, for now at least.

But Bank of England governor Mark Carney emphasised last month that while unemployment is nearing its 7 per cent target and the UK economy is growing, “a return to growth is not yet a return to normality”.

UK interest rates have been at the historic low of 0.5 per cent for almost five years – since March 5 2009, and from the recent Bank of England forward guidance, this is expected to be the case for some time yet.

In what could be a turnaround year, gilts – the unloved sector of fixed income for some time – have had a stronger start to 2014 than some of the other sectors. The question remains whether this is simply the result of current macroeconomic plays and, as such, just a short term blip before the higher risk areas of high yield and the flexibility of strategic bonds start to come into their own again.

Nyree Stewart is features editor at Investment Adviser