Investors poured $23 billion into taxable bond funds in September: Morningstar

Vanguard and BlackRock get biggest inflows.
OCT 19, 2016
Investors had a fever in September, and the only cure was more bond funds. Bond funds got more assets in September than Blue Oyster Cult fans got cowbell. Investors poured $23.3 billion in net new cash to taxable bond funds last month, according to Morningstar. Municipal bond funds saw inflows of $4.5 billion. Intermediate-term bond funds were the most popular in September, with a net inflow of $10.5 billion. Short-term bonds came in fourth place, with a $3 billion inflow, just behind large-blend stock ($5.4 billion) and real estate ($3.7 billion). Ultrashort bond funds saw a $2.5 billion inflow. Biggest beneficiary of September's bond boom: Prudential Total Return Bond (PDBAX), which took in $1.9 billion, the most new money of any actively managed fund. PIMCO Income (PONAX) came in second place, with an estimated $1.3 billion inflow. At the same time, the actively managed fund with the biggest net outflow was PIMCO Total Return (PTTRX), which saw $1.7 billion flee. Templeton Global Bond (TPINX) saw an estimated $1.1 billion head for the exit. Some bond fund categories showed losses in September, as the bellwether 10-year Treasury note yield climbed to 1.61% Sept. 30 from 1.57% August 31. Long-term bond funds fell 1.01%, including reinvested dividends, and corporate bond funds fell 0.05%. Intermediate-term bond funds rose 0.07%. Stock funds remained unpopular in September. Investors yanked $4.2 billion from U.S. stock funds, continuing a year-long hemorrhage. The past 12 months, investors have taken $236 billion from actively managed stock funds and poured $184.6 billion into passively managed funds. All told, $51.6 billion has left stock funds the past 12 months. However, in a contrarian trend, international equity funds saw net inflows of $18 billion. Vanguard continued its dominance of fund flows in September, as investors put $1.8 billion into its actively managed funds and $21 billion into its passive funds. BlackRock came in second, with $2.5 billion flowing out of its active funds and $10.7 billion into its passive funds.

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