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Lipper: Investor Demand For Core Bond Funds Spikes
FYI: After a slow start to 2019, the Core Bond Funds peer group has experienced near record-setting net inflows thanks to the Federal Reserve’s policy change regarding its stance on interest rates. The Core Bond Funds group started the year with three straight weekly net outflows—for a total net negative flow of $1.1 billion—coming on the heels of the group’s worst-ever quarter for flows. In Q4 2018, Core Bond Funds saw almost $36.6 billion leave their coffers, which eclipsed the previous quarterly high net outflow (-$29.6 billion in Q3 2013) by a significant amount. The tide turned for the peer group in mid-January, when the Fed walked back the hawkish stance it had taken on rates (as well as its balance sheet reduction program) at its December meeting. Federal Reserve Chairman Jerome Powell stated the Fed would be patient on its interest rate policy and would need to see a reason to raise rates (such as an increase in inflation) before doing so. This contradicted the Fed’s forecast in December, which called for two rate hikes in 2019. The Fed also announced it would stop selling the bonds it has on its balance sheet relatively soon. In the aforementioned December meeting, Powell stated the balance sheet reduction program was on auto pilot and the Fed was not reviewing it for any changes. Regards, Ted http://lipperalpha.refinitiv.com/2019/05/investor-demand-for-core-bond-funds-spikes/?utm_source=Eloqua&utm_medium=email&utm_campaign=00008DM_NewsletterLipperAlphaInsightFundInsightsWeekly_Other&utm_content=Newsletter_FundsWeekly_13May2019&elqTrackId=097cc64048024364b58f72cb0b28f421&elq=708248568024426c8622c9afa7968c90&elqaid=47053&elqat=1&elqCampaignId=166
