Sharing artikel Morning Star. Good or bad news nih buat bei? :) Fund Flows: Investors Turn on Bond Funds
Long-term flows go negative; muni-bond funds suffer record outflows. By Kevin McDevitt, CFA | 01-24-11 |  Bond funds fell further out of investor favor in December. There were an estimated $10.6 billion in long-term outflows in December, most of which came from fixed-income offerings. This follows modest $5.1 billion long-term inflows the previous month. This is the first time since May 2010 that long-term flows have been negative. Money market funds also experienced outflows of $2.2 billion, which owed to $7.3 billion leaving taxable vehicles. Tax-free money market funds, on the other hand, collected $5.1 billion. Redemptions in municipal-bond funds soared to a record $13.4 billion in December, which builds on the previous month's $7.6 billion in outflows. More on this subject follows below, but note that the past two months of combined outflows represent roughly 4.4% of current municipal-bond fund assets. Although not nearly as cataclysmic, taxable-bond flows also turned negative in December for the first time in more than two years, as funds shed nearly $4.5 billion. This was the first time since November 2008, when the credit crisis was still in full roar, that money left taxable-bond funds. While negative flows are new, the trends within the asset class are not. As we have pointed out in past commentaries, flows into short- and intermediate-term bond funds have been declining since September 2009. Alternatively, investors seem to be slowly warming to equity funds. U.S. stock funds still shed about $7.6 billion in assets in December, though, marking the eighth consecutive month of outflows (this despite the S&P 500 index's 15.2% return in 2010). But the pace has slowed considerably, especially considering that most of this past month's outflows stemmed from a shift in asset allocation for Vanguard's target-date funds and several fund of funds. Vanguard announced this past September that it would increase the international equity allocation in these funds to 30% from 20%. That change hit fund flows in December as  Vanguard Total Stock Market Index ) showed outflows of roughly $7 billion, while  Vanguard Total International Stock Index ) recorded inflows of more than $8 billion. If these exchanges are stripped out (as they do not reflect new investor contributions or redemptions), then U.S. equity funds would have lost less than $1 billion in December. This would mark the smallest level of outflows during the past eight months. Meanwhile, international stock funds would have taken in a net $2.9 billion--most of which went into emerging-market funds--after subtracting the Total International Stock Index inflows. Even with this adjustment, international stock funds have now enjoyed four consecutive months of inflows. Taxable Bond Within the taxable-bond universe, most of the damage in December hit the two largest categories: short-term and intermediate-term funds. Short-term bond funds lost $1.4 billion, while intermediate-bond funds shed more than $8 billion. We estimate that $241 billion  PIMCO Total Return ) endured redemptions equal to approximately 3% of total assets. This follows the fund's roughly $2 billion in November outflows. Perhaps some investors are starting to agree with Bill Gross that future bond returns don't look terribly attractive. Keep in mind, though, the impact of rising interest rates. The yield on the 10-year Treasury has spiked about 100 basis points since early October. Intermediate-term bond funds dropped nearly 0.8% on average in December alone. Intermediate-term government funds, which tend to be more rate sensitive, got hit even harder and suffered their worst month of redemptions in more than seven years. Investors pulled about $3.1 billion in December, which is the most since $4.5 billion was redeemed in August 2003. Curiously, though,  Vanguard GNMA ) and  Fidelity GNMA ) saw the greatest outflows last month of more than $800 million and $400 million, respectively. Agency mortgage funds tend to outperform Treasuries in rising-rate environments. Indeed, both funds are in the category's top third over the past three months.  Bank-loan funds are even better equipped for rising rates, though, which helps explain the category's $3.9 billion spike in December inflows. This was the category's biggest haul in its history and is nearly double the previous $2.2 billion high scaled this past April. Performance has certainly contributed to recent interest, as lower-quality bonds have rallied hard since the credit crisis. The category gained 9.3% in 2010, and it fared better than most bond groups after rates began climbing in early October.  Fidelity Advisor Floating Rate High Income ) has been one of the primary beneficiaries of this interest, as it took in nearly $800 million in December and more than $3.5 billion for the year. That's about a fifth of the category's total. The fund maintains a relatively conservative credit profile, though, compared with some of its freewheeling peers, which suggests that investors are not blindly chasing performance. The fund actually didn't keep up with most of its rivals in both 2009 and 2010 as lower-quality credits performed best. That was generally true with other popular taxable-bond categories such as world bond, high yield, multisector bond, and emerging-markets bond as well. These were also the four most popular taxable-bond categories in December after bank loan. Collectively, these five categories took in $95.5 billion in 2010, which isn't that far behind the combined $101.9 billion collected by short- and intermediate-term funds. This is striking because the short- and intermediate-term categories dominate the taxable-bond universe, with a combined 54% market share and roughly $1 trillion in assets. The other five categories collectively are barely more than half that with $535 billion in total assets. This suggests that investors remain more comfortable taking on credit risk than rate risk these days. Although the pace of flows into world bond and emerging-markets bond funds is slowing, the desire for diversification outside the United States remains solid, too, given the $2.1 billion deposited into world-bond funds in December and nearly $650 million for emerging-markets bond. This trend showed up even within the emerging-markets bond category, as six of the 10 most popular funds in December were those focused on local currency debt. Sent from my AXIS Worry Free BlackBerry® smartphone ------------------------------------ Kunjungi situs http://www.info-saham.com untuk informasi seputar saham. 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