Bond Funds Still Winning Favor

Strategic Insight recently posted their summary of mutual fund flows for December...

Bond funds saw flows moderating to $29 billion in December, but still ended up establishing an all-time record for the full year with an almost $400 billion net intake. In contrast, flows into equity funds remained subdued despite the ongoing global stock market revival due to investor ambivalence about its sustainability, and continuing low risk appetites overall. Within the equity fund area, the recent dichotomy between internationally-investing and US-focused programs persisted, with the former continuing to draw modest inflows (helped by investor interest in boosting emerging market allocations in their portfolios), and the latter suffering small net outflows. December saw international equity funds garnering $8 billion.

Still bond mutual funds over all others

Strategic Insight is reporting that November mutual fund flows are still moving into income paying bond mutual funds, probably leaving maturing CD's. Here is their summary...

Flows into bond funds in November, although somewhat off from the blistering pace of the prior three months, were very robust at $38 billion. Driven by continued strong demand for income in a near-zero cash yield environment, bond fund flows have reached extraordinary levels in 2009. In contrast, notwithstanding a 4.8% rise in NAVs on average (asset-weighted) in November, stock/hybrid funds received only small inflows over the month, because of continued concerns about the sustainability of the global economic and stock market revival.