Wed, 18 Dec 2013
Slowing economic growth in emerging markets weighed on hedge funds in November.
Strong 2011 returns and perceived safety led to continued popularity for bond funds last month, while domestic growth funds suffered redemptions.
Equity funds have experienced outflows over the last five years, but the exodus is not as extreme as it's portrayed.
ETF and open - end asset flows combined show a strong preference for bonds , emerging markets, and passive funds, while active U.S. stock fund managers and money market funds have suffered the brunt of outflows.
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.
Although investors may remain broadly skeptical of equity markets, asset flow data suggest they could be taking more risk than expected in other asset classes.
Investors should dig into their bond portfolios to understand all the places their managers are hunting for yield, says Morningstar's Eric Jacobson.
Morningstar's director of fixed-income research offers his tips for selecting a solid core bond fund along with some of his favorite choices.
Although the default picture has improved in high yield , junk bonds could still get clocked if the economy falters or we face a double-dip recession, says Morningstar's Eric Jacobson.
Investors sent money to municipal bond mutual funds for a sixth consecutive week, though at a decreased pace.
Don't swap your whole fixed-income position for dividend-paying stocks.
©2014 Morningstar Advisor. All right reserved.