12.11.18
Bond Buyers Fear Market Volatility, Not a Recession, Fund Flows Show
by: Sunny Oh
Recent data on fund flows indicate bond investors are less worried about U.S. growth prospects than they are about an extended regime of higher market volatility. Fund flows show mutual fund managers have not piled into long-dated Treasurys, a move suggesting they were harboring growth concerns, instead sticking with cash-like instruments that can be sold swiftly without incurring price losses. That corresponds with the view of market observers like Jeffrey Gundlach of DoubleLine Capital, who say the rally in the long-end was not driven by a fundamental shift in the bond market's outlook for the economy as much as the activities of trigger-happy traders and speculators whose buying and selling are tracked by the Commodity Futures Trading Commission.
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