(Bloomberg) -- The market is expecting fewer rate hikes from the Federal Reserve after last week's dovish meeting, and returns for both hedge funds and mutual funds are taking a hit because of it.

The Fed, concerns that the U.K. may potentially leave the European Union, and last month's poor jobs report in the U.S. have all caused the markets to price in lower interest rates for longer, with bond yields in Europe, Japan, and the U.S. all hitting multiyear (if not record) lows. A team at Deutsche Bank AG, led by Chief Global Strategist Binky Chadha, points out how this has damaged returns for actively managed equity and bond funds alike.

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.