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Commentary

Despite Rocky Market, Few Surprises in January's Fund Flows

The exceptions: Momentum in muni-bond fund flows, and commodities funds show signs of life.

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January flows appear to have reverted to the general 2015 pattern: outflows from U.S. equity and inflows to international equity.

More interesting are municipal-bond flows, which have been gaining some momentum since October. Inflows to municipal-bond funds have been positive since October and on the rise in the past two months. Taxable-bond funds, on the other hand, have experienced volatile flows, negative for the most part, since June. With the recent interest-rise in the United States and increased uncertainty about where the bond market is heading, it seems investors are betting on the more certain benefits of municipal bonds--safety and tax breaks.

Alina Lamy does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.