News | 07.07.21
U.S. Bond Funds Rake in More Cash Despite Inflation Fears
Net inflows into US bond funds are far outpacing those for comparable equity instruments this year, confounding expectations that inflation fears would erode the appeal of fixed-income holdings. Bond mutual funds and exchange traded funds have added $372 billion as of June 23, compared with a gain of $160 billion for equities, according to the Investment Company Institute (ICI). Bond funds are on pace to eclipse the $446 billion of inflows in 2020 and $459 billion in 2019. Analysts attributed the popularity of bond funds to concerns about lofty stock valuations and an aging population’s need for steady income during retirement. “Financial advisors follow asset allocation models and portfolio rebalancing and demographics are strong trends,” said Shelly Antoniewicz, ICI senior director of financial and industry research. “The cumulative flow to bond funds lines up nicely with the percentage of the population over 65 years.”
Read the full article on Financial Times.