Passive equity funds, noncore bonds, alternatives, and many of the fund shops that sell them fared well last year, while core bonds, commodities, and gold suffered.
U.S. equity funds have seen their strongest inflows since 2000 this year, as passive funds continue to garner strong interest, active fund outflows moderate, and investors sell their core bond funds.
Bill Gross adds management duties on PIMCO Unconstrained Bond while its longtime manager is on a sabbatical, Arif Husain taking over T. Rowe Price International Bond, and more.
Taxable-bond funds led open-end asset flows in February, with investors showing interest in emerging-markets bonds and bank-loan funds.
Income-hungry investors sought out niche fixed-income funds like bank-loans and non-traditional bonds in the first quarter, while the so-called great rotation into stocks is not yet confirmed.
After strong flows into stock funds earlier this year, investor interest in equities is waning as bond funds remain in high demand, says Morningstar's Mike Rawson.
Investors should be cautious of rapid inflows into high-yield and bank-loan funds as managers could have difficulty putting excess money to work in high-conviction ideas.
May flows data show investors are putting money to work in nontraditional fixed-income holdings, as well as emerging-markets equities, for perceived better returns.
Many managers are of the mind that rates have gone about as far as they're going to go for a while, so investors probably don't want to exit the bond market while their funds are down, reports Morningstar's Eric Jacobson. Plus, get an update on fund category performance in the second quarter as well as updates on fund leaders and laggards, including PIMCO Total Return.
As yields rose, both taxable- and municipal-bond funds saw record monthly redemptions in absolute terms in June.