The Markets
Bond Funds Still Winning as Investors Dive Back into Market
U.S. mutual fund investors put an estimated $30 billion into stock and
bond mutual funds in February, according to Strategic Insight (SI), an
Asset International Company.
Reported by Rebecca Moore
The popularity of bond funds continued, as investors put about $24 billion into bond funds in February. According to estimates from SI’s Simfund database, leading the inflows were short- and intermediate-maturity corporate bond funds, with roughly $10 billion in combined net inflows. Global bond funds captured more than $4 billion in the latest month, and inflation worries triggered inflows of $2.5 billion to TIPS funds.
Reflecting cautious investment attitudes, long-short/market neutral stock funds gained $2 billion in February and may be on pace to break their $13 billion record last year. Flows into diversified U.S. equity funds were negative in February, despite the average domestic equity fund delivering a 3.4% total return in the month and nearly 60% return for the prior 12 months.
Investors put about $6.5 billion into international equity funds, led by $2 billion into global tactical asset allocation funds, with the balance into globally diversified funds. In February, the torrent of money into emerging markets slowed, as China, Latin America, and Asia-region funds experienced modest net redemptions.
Separately, SI said exchange-traded funds (ETFs) experienced $5 billion of aggregate net inflows during February, a turnaround from the net redemptions seen in January. The biggest draws were U.S. equity ETFs (including the SPDR S&P 500 ETF), short-term bond ETFs, and equity sector ETFs. At the end of February, U.S. ETF assets stood at $760 billion.