"Investors are unwinding the big bond selloff since the U.S. election, showering U.S.-based fixed income funds with the most new cash in five months during the latest week, Investment Company Institute data showed on Wednesday. U.S.-based bond funds harvested $9.6 billion in new cash during the week ended Jan. 11, the most since early August, according to the trade group."
http://www.reuters.com/article/us-usa-mutualfunds-ici-idUSKBN1522MB
Comments
Thanks for posting the article.
In checking my fixed income sleeve, this morning, all my bond funds are up for the past week and thirty days (about one percent). So, it is not surprising that money is flowing back into fixed income. It will be interesting when the Fed's raises interest rates again if this recent new money sticks.
Have a great day ... and, I wish all "Good Investing."
Old_Skeet
Day, Week, One month, Three month and YTD Corporate bonds were one of the better performing bond sectors in the investment grade area for most of 2016. This bond area got the whack from July, 2016 until late November when money started to buy these bonds again.
This bond area, if nothing changes for today (Jan. 19) will go negative for YTD at the market close.
A trend? Watching at this house is all I can state right now.
Oh, the times, they are a chang'in.....Well, yes; always chang'in.
Take care,
Catch
What does "a bit early" mean???
Thank you,
Catch
LQD (corp. bonds) closed down today, Jan. 19 (Thursday) -.34%.
-1% for the last two trading days......very smelly, IMHO. Perhaps most equity sectors are going to catch fire after Jan. 20. Magic eight ball indicator will not function at this house.
Note: only 5 digit mutual fund tickers now highlight here, thus I named LQD above for those not familiar with this symbol.
My question is in the thread that you posted/started..."Investors race back to U.S. bond funds". May be difficult to view with the IPhone. I'm presuming you saw a message to you that a post had been added to your thread. You'll have a proper overview with a PC/Mac.
In reviewing the income area of my portfolio which consists of two sleeves one a fixed income sleeve and the other a hybird income sleeve with a combined area total of 15 funds I do not have a single fund that has not had positive returns so far this year. And, the area as a whole is up so far this year by 1.2% as of this evenings market close.
Can it go the other way? You can better believe it can and most likely will if the flood of recent bond money starts to flow. However, with the 10 year now yielding about 2.5% perhaps it might bring more "flood" money in as I am thinking bonds became oversold with investors selling bonds and moving money to stocks during the recent stock market bull run. And, we are now seeing investors rebalance portfolios selling off some stocks (taking profit) and now buying bonds to rebalance portfolios.
Take care ... and, have a good evening.
Skeet
It must be working because the YTD returns are 0.08, 0.22, 0.76, and 2.14.
This is just the bounce back after being oversold... Hard to believe anyone will make money in bonds if inflation breaks thru 3%... But this all depends on the President delivering the "jobs"
If you can trade on sentiment and a belief in "making America Great Again" more power to you but it is a very very difficult task.
I dont think I join Gary Schilling believing Treasuries are a huge buy but I use bonds as defensive assets...Cash ( at 0.3 to 0.6) now looks pretty good...
http://americancenturyblog.com/2017/01/refocus-on-fundamentals-and-risk/?utm_campaign=DM-InvestorInsightsJan172017&utm_source=Eloqua&utm_medium=email&utm_content=CIOAA1Q17-1
* I find M*'s X-Ray unreliable in identifying realistic cash percentages within a portfolio. Even something as docile as Price's ultra-short fund (TRBUX) will show up in the results as bonds.
In that scenario, I don't see much reason to reposition in the shorter term. (But if I had heavy equity exposure, I'd think different, since the magnitude of the risks in that case would be asymmetric).
See above. I think the buying opportunity is still to come.
Economic Overview:
Week Ending January 20, 2017 © 2017 Payden & Rygel All rights reserved.
From 2011 to 2015, the world inflation rate fell year after year. By 2016, the world was abuzz with deflation mania, fearing a further decline in the rate of inflation. Instead, as commodity prices recovered and global growth found its footing, consumer prices perked up in 2016. For 2017, there is a reason to believe the deflation fear may be behind us, as updated forecasts released by the International Monetary Fund (IMF) this week show an expected annual pick-up in prices for the second time in the last five years.
Highlights of the Week:
Treasuries: Treasury markets absorbed stronger inflation and housing data this week. Yields ground higher every day in this holiday-shortened week. The icing on the cake was Yellen’s speech on Wednesday where no one anticipated any remarks with regards to monetary policy and received hawkish ones at that.
Securitized Products:
The ABS market is following along with Ford auto receivables bringing a fully compliant ABS deal both regarding the 5% risk retention requirement and full loan level disclosure. The queue for next week is also full of issuers ready to hit the marketplace.
High Yield:
In this environment, the market has room to compress further, particularly given low expected default rates. Prudent, valuation-conscious investors should be rewarded.
Emerging Markets: The latest activity data from China was a reminder of the country’s adjustment from investment-led to consumption-driven growth. December industrial production and xed asset investment growth eased modestly to 6.0% year-over-year (y/y) and 8.1% y/y, respectively, while retail sales came better than expected at 10.9% y/y.
Municipals Municipal bond funds experienced a second consecutive week of in ows, taking in an additional $511.74 million. Investor demand has been strong, with $10 billion in new issuance well received and broad follow-through in secondary trading.
https://www.payden.com/weekly/wir012017.pdf
Honey. I think the kids are (finally ) leaving ! + We Look Back At Obama Years From Hoya Capital
...demographics over the next ten years are highly favorable to apartment demand. Rent growth data will certainly be interesting over the next several years: it will be a battle between high levels of supply and high levels of demand.
Real Estate Weekly: Trump Takes Office, We Look Back At Obama Years
Hoya Capital Real Estate Jan. 20, 2017
With Donald Trump taking office this week, we think it's interesting to look back at the performance of REITs under the Obama Administration.
REITs returned an average of 13% per year (price) and roughly 17% including dividends. Interesting, this 175% holding period return is almost exactly inline with the broader S&P 500 index.
It's important to note the context, though. Obama took office at almost the exact bottom of an 80% decline in REIT values over the preceding 18 months as the REIT ETF bottomed just a month after inauguration.
Bottom Line So how will real estate perform under Trump? Well, we can pretty confidently say that commercial real estate won't perform as well under Trump as they did under Obama, but that should be rather obvious. Trump enters office at a time that commercial real estate values are near record highs and valuations appear healthy. Based on prevailing cap rate and economic growth expectations, REIT investors should continue to expect a 5-8% average annual total return with plenty of annual volatility.
http://seekingalpha.com/article/4038310-real-estate-weekly-trump-takes-office-look-back-obama-years
Treasury yields are up since Election Day. The benchmark 10-year Treasury is currently trading at 2.47% (as of Jan. 19, based on daily data via Treasury.gov). That’s up from 1.90% on Election Day and close to the highest level in two years.
http://www.capitalspectator.com/moderate-us-growth-prevails-at-dawn-of-trump-era/