August 13, 2012
--- The search
for safety led to bond fund demand across a spectrum of corporate and U.S.
government funds, high and low credit quality, and global bond strategies. ---
In total, U.S. stock and bond mutual funds (open-end and
closed-end mutual funds, excluding exchange-traded funds [ETFs] and funds
underlying variable annuities) posted a net inflow of $17 billion for July,
with bond funds garnering $30 billion in new investments.
Year-to-date through July-end, bond fund flows neared $180
billion, more than 50% above full-year results for 2011, according to Strategic
Insight, an Asset International company. Contrasting the interest in bond
funds, U.S. equity funds registered another month of net redemptions in July
increasing to $13 billion, while international equity funds benefited from small
positive inflows of $1 billion.
“Investors continue to dismiss the positive trends reflected
in steady gains in the economy, employment, real estate prices and the
potential for capital appreciation through higher allocation to stock funds.
Instead, investors stay very focused on capital preservation for the near
term,” said Avi Nachmany, SI’s director of research.
Separately, SI reported, U.S. ETFs enjoyed $14 billion in
net inflows this July, another very strong month, mostly through stock exchange-traded
products (ETPs). That brought total ETF net inflows (including (exchange-traded
notes) ETNs) to nearly $90 billion so far in 2012.