Investors flock to low-risk bonds
Morningstars December fund flows exposed an appetite gap between investment grade bonds and higher yielding, riskier bonds.
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Morningstars December fund flows exposed an appetite gap between investment grade bonds and higher yielding, riskier bonds.
High yield bonds registered a record 7.3bn in net outflows in December, according to Morningstar’s latest fund flows data. European investors reacted strongly on a momentary market correction that month.
The biggest equity asset classes all witnessed net outflows from European investors in November, while bond funds continue to attract more inflows.
Mutual funds with the highest possible rating attract almost all inflows from investors, while lower-rated funds register large net outflows.
In October, fund selectors hastily reduced their allocations to European and emerging market equities and fled into ‘safe’ US equities.
European investors pulled 5.3bn out of high yield funds in September, while they propped up their holdings in investment grade corporate bonds and long/short debt.
Net outflows from European equity funds broke a new record in September, according to Morningstar’s latest fund flows.
Net inflows into mutual funds by Spanish and Italian investors spiked in the first eight months of 2014
European equity mutual funds registered unprecedented outflows last week. According to Bank of America Merrill Lynch, funds invested in European stocks shed $5.7bn.
Net outflows from European equity funds accelerated in August, while developed bonds are showing an upsurge.
Mutual funds which invest in European equities suffered net outflows in July for the first time since March 2013.
European investors pulled out a net 5bn from USD corporate high yield funds alone in July.