Tue, 16 Sep 2014
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Investors have been putting money back into bond funds as interest rates have unexpectedly dropped this year.
September and third-quarter asset-flows data show that investors remain cautious of interest - rate risk and a fully valued stock market, and instead prefer nontraditional bonds and foreign equities.
As Fed policy tightens over the short term, investors will have to actively manage interest rate exposure while looking ahead to a 'new neutral' in the next three to five years, says PIMCO's Jerome Schneider.
As yields rose, both taxable- and municipal- bond funds saw record monthly redemptions in absolute terms in June.
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