Bank of America: Fixed Income Funds See First Outflow in 24 Weeks - FJElite

Fixed income funds recorded their first outflow after 23 consecutive weeks of inflows, as rising government bond yields, elevated rates volatility and stretched valuations pushed investors to reduce risk. Both investment-grade and high-yield credit funds saw outflows for a second straight week, with pressure particularly concentrated in medium- and long-duration IG funds and European high yield.

Higher “risk-free” yields are reducing the incentive to take additional credit risk, and pressure is expected to persist until rates volatility and government bond yields stabilise. Government bond funds still attracted inflows for a second week, while global EM debt funds extended their inflow streak to seven weeks. Equity funds also returned to outflows, although equity ETFs continued to attract money for a seventh consecutive week.