Investments into bond fund are on pace this year to exceed 2011 and 2010 results, according to the market research firm Strategic Insight.
Bond funds gained another $32 billion in September, and are projected to grow to more than $300 billion in net inflows for the full year, exceeding the 2010 and 2011 pace, the research shows.
Investors in stock funds remained cautious, though, despite stock markets double-digit returns so far in 2012. Equity fund shareholders are taking some of their recent profits “of the table,” as stock fund redemptions during September were at the highest monthly level this year, climbing to $17 billion, the report states.
“Insatiable demand for income and a lingering, semi-permanent state of investment anxiety continue to drive the choices for most mutual fund investors,” says Strategic Insight Director of Research Avi Nachmany. “We anticipate recent investors’ preference to persist in the coming months, but that a slow rotation towards stock funds may emerge in 2013.”
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Asset allocation funds attracted nearly $1 billion in net flows during September, bringing the quarterly net intake to $3.8 billion, the report adds.