Bond market ETFs have taken a hit from the Federal Reserve’s rate hikes.

Bond yields, which move in the opposite direction of prices, have risen since the Fed started increasing interest rates in March of last year. Because bond ETFs closely follow bond prices, several have dropped precipitously as rates have risen.

With over $92 billion in assets, the iShares Core U.S. Aggregate Bond Market ETF (AGG), one of the largest bond market funds, has declined about 12% since the Fed began hiking rates.1 AGG is based on the Bloomberg Aggregate Bond Index, which is a proxy for the whole US bond market. Vanguard's Total Bond Market ETF (BND), a comparable all-encompassing bond market fund, has lost almost the same amount.

Long-duration Treasury bonds, or Treasurys with the longest period to maturity, have been among the most beaten ETFs. Since the Fed began raising interest rates, the iShares 20+ Year Treasury Bond ETF (TLT), which invests entirely in the longest-dated Treasurys, has lost more than 30%.

ETFs investing in shorter-term Treasurys have seen lower losses. The iShares 7-10 U.S. Treasury Bond ETF (IEF), which invests in medium-term Treasury bills, is down almost 15%. The iShares 1-3 Year Treasury Bond ETF (SHY) has declined little less than 4%, the lowest drop among major bond ETFs.

ETFs that specialize on corporate bonds have also failed. Since March of last year, the SPDR Portfolio Corporate Bond ETF (SPBO) has lost 13%.4 High-yield bond ETFs have outperformed their investment-grade equivalents, with the Bloomberg High-Yield Bond ETF (JNK) down slightly more than 11%.

According to legal firm and consultancy White & Case, higher refinancing rates may be contributing to high yield's outperformance. In the first half of this year, refinancing accounted for 62% of activity in the approximately $50 billion high yield market, up from 37% last year. Due to strong inflows, average high-yield bond rates declined to 8.3% in the second quarter from 9.8% the previous quarter.