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It's A Bond Picker's Market: Bond Funds Have Biggest Inflow In History
Remember the "great rotation"? Neither do we, because the bank that year after year coined the term to prepare investors for a renormalization of the economy as bond yields rise alongside stocks (something that happens in any normal, non-centrally planned banana world), that would be Bank of America for anyone confused, just reported that in the latest week, EPFR data showed inflows to all fixed income funds of $16.04 billion – the highest on record going back to at least 2008. On the "other side of the spectrum were stocks that had $5.52bn of outflows, down from a $1.62bn inflow in the prior week." And just like that, it's a bond-pickers' market, even as central banks trade with each other in various dark pools to keep global equities, and thus confidence, stable even as the capital tsuniami screams deflation for years to come.
From BofA:
Mutual fund and ETF flows are catching up to the January collapse in interest rates. Recall that flows typically flow returns, but with a lag. Hence following the very strong bond returns in January last week’s inflow to all fixed income funds was $16.04bn – the highest on record going back to at least 2008. Interestingly, the second largest weekly inflow of $14bn happened during the week ending February 5 2014 – also following a precipitous decline in yields (and a sell-off in stocks) in the prior month of January. Inflows to bond funds were strong across sectors. Inflows to high grade jumped to $6.14bn from a $3.29bn inflow in the prior week. Treasury funds reported a large $5.12bn inflow. Inflows to high yield stayed very strong at $2.94bn. EM bond funds saw a $0.88bn inflow after reporting a small outflow in the prior week. Finally, muni fund inflows remained robust at $0.89bn.
Broken down by debt type:
At the other side of the spectrum were stocks that had $5.52bn of outflows, down from a $1.62bn inflow in the prior week. Loan funds continued to report outflows, totaling $0.38bn last week. Money market funds also reported outflows of $20.11bn. Finally, note that the weekly reported inflows to high grade funds could be affected by PIMCO-related flows. PIMCO flows are not included in the weekly data, but some of the offsetting inflows are included, thus biasing the weekly high grade flow data higher.
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It almost makes you wonder without central banks and corporate buybacks where the S&P 500 would be...
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And 30% of those are negative.
We're all fucked. And not in the way that Arius likes to fuck -- but the way "normal" people like to fuck.
Martin Armstrong has been talking about the popping of the bond bubble occurring later this year (10/1/2015) after people begin to lose faith in governments and the rates begin to rise.
http://armstrongeconomics.com/2015/02/02/beware-the-turning-point-for-bo...
They are all juggling fools I say.
Is the expression "bond picker," considered racist by someone?
Piling into bonds just as they get slammed by higher payroll numbers.
"begin" to lose faith....ROFL
More articles like this one please
Money market fund managers had to waive fees a number of years ago. If they charged full price on a MMF today with 3 mo LIBOR at 26 bps, the yield would definitely be negative. Fidelity’s main MMF (SPRXX) yields 1 bp (not a typo), which would be -14 bps “without subsidy.” AUM is $2.4bn. Who would invest in this?
Insanity reigns.
NOTHING is normalized, so even flow data is likely manipulated.
A classic flight to safety LOL !
I want to smell paper burning in the morning...
It will smell like VICTORY.