With rising interest rates come lower bond prices. So it
should come as little surprise that investors are fleeing bonds
In fact, according to the
latest long-term mutual fund flow data from the
Investment Company Institute
, investors continued to flee bonds en masse last week and have
pulled out over $32 billion from bond funds over the last 3
(Keep in mind that these figures are for mutual funds only.
Perhaps ETF gurus Eric Dutram and Neena Mishra can give us some
insights into ETF flows.)
What's interesting is that while investors are fleeing bonds
right now, most of them are not putting that money into stocks,
as you can see in the chart above. My guess is that they're just
sitting in cash for now until rates stop climbing.
But when do you think we will start to see positive
inflows back into bonds?
A. Very soon. Investors overreacted, and the recent trend will
B. As soon as interest rates show more stability. Investors need
to know they won't get burned first.
C. Not until QE officially ends and interest rates have
D. Not for a long, long time. The bull market in bonds is
Chime in below!
ISHARS-BR AG BD (AGG): ETF Research Reports
VANGD-TOT BOND (BND): ETF Research Reports
ISHARES GS CPBD (LQD): ETF Research Reports
ISHARS-BR TRES (TIP): ETF Research Reports
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