Cash Funds seeking Bond ETFs
Cash flowed into bond ETFs this week and out of stock funds!
Clear sign that institutional investors again see fixed-income as a potential haven if the U.S. economy tips into recession this year.
Tweet on Bond ETF cash flow
Cash flowed into bond ETFs this week and out of stock funds!
a clear sign that institutional investors again see fixed-income as a potential haven if the U.S. economy tips into recession this year!#bonds #etf #recession pic.twitter.com/OKPrbCaYzq
— The_Journalbiz (@the_journalbiz) January 6, 2023
Creditsights chart on bond etf cash funds
Asset managers often use bond ETFs to rapidly boost or lower exposure to bond markets.
Fixed-income ETFs raked in $7.4 billion in the seven days ending January 4, the highest level in six weeks, while stock ETFs lost $3 billion, according to CreditSights Inc.
Investment firms like Blackrock are calling for corporate bonds to outperform this year because of their relatively high yields and borrowers’ strong balance sheets.
Investment-grade ETFs got $419 million of net inflows after two weeks of outflows and junk bond ETFs took in $138 million. The fund flows coincided with a surge in junk-bond trading on Wednesday, according to CreditSights.
Bond mutual funds experienced outflows, but at a slower pace than in late December, indicating that retail investors may be turning less bearish on the market, which suffered heavy losses last year.
