Diverging fund flows are reflected in performance – Sober Look

This is a syndicated repost courtesy of Sober Look. To view original, click here.

Print Friendly

Capital is returning to certain fixed income sectors. Fund flows are quite uneven however, with the corporate sector remaining investors’ favorite. In particular, high yield bonds have recouped a great deal of the recent outflows.

Source: Goldman Sachs

In contrast, mumi bonds have seen almost no new net inflows. The little problem in Detroit is not helping the situation (see story) and the SEC going after the city of Miami (see story) has made the sector look quite unappealing.

Source: Goldman Sachs

Outside of treasuries, fixed income performance these days is extremely sensitive to fund flows. And the returns over the past month (June 20th – July 19th) fully reflect these dynamics in mutual funds and ETFs.

SoberLook.com

From our sponsor:

Spread it!Tweet about this on TwitterShare on FacebookShare on LinkedInEmail this to someonePrint this page

Keep track of the insanity of the Fed, Primary Dealers, the US Treasury, other central banks and a whole cast of nefarious characters as they drive markets in the Wall Street Examiner Professional Edition Fed Report and Treasury update. Try the Professional Edition risk free for 30 days!