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Investors Remain Infatuated with Bond Funds in April

International-equity funds experience outflows, American Funds overtakes Fidelity in terms of assets, and the large-blend category enjoys inflows thanks to two funds.

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Investors continued to gravitate toward fixed income for the third consecutive month in April. Taxable- and municipal-bond funds were the highest-receiving Morningstar category groups, with estimated net inflows of $22.8 billion and $5.9 billion, respectively. Taxable bonds received balanced inflows on both the active and passive side; municipal bonds received a majority of the inflows on the active side (not surprising, since there aren’t many passive municipal-bond fund options out there).

All the equity category groups (and allocation) sustained outflows in April on the heels of weak U.S. corporate earnings and a disappointing employment report, which fueled concerns that the U.S. economy might be losing momentum. Active equity funds once again bore the brunt of these outflows; all flows into passive equity funds were positive, although not large enough to drag the overall flows into positive territory.

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