“One of the key questions right now” Bank of America’s latest Situation Room report begins, “is why we continue to see large inflows to high-grade bond funds and ETFs when total return performance - traditionally the main driver of retail flows - has been flattish over the past five months or so.”
According to report, over the past 12 months monthly inflows into high-grade bond funds and ETFs, has averaged between $20 billion and $30 billion. However, over the same period, these funds have produced a return of around 0%. Rolling three-month returns declined to -4% at the beginning of 2017 before moving to approximately 2% by the middle of the year, before falling back to zero by the...
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