Call it the revenge of the bond fund managers. U.S. Treasuries were written off by many investors in the first quarter but now yields on the 10-year note have violently pulled back to the lowest levels of 2013.

The iShares Barclays 20+ Year Treasury Bond Fund (NYSEArca: TLT) soared Friday after the dismal March jobs report to cap a nearly 5% rally for the week.

Also Friday, the PIMCO Total Return ETF (NYSEArca: BOND) managed by Bill Gross rose to its highest level since launching in March 2012.

The PIMCO ETF now holds $4.6 billion after gathering more than $700 million of inflows last month. [PIMCO Total Return Fund and ETF Vie for Cash]

The strong recent performance and lingering cash inflows to bond ETFs and funds show that talk of a “Great Rotation” from bonds to equities was premature. U.S. Treasuries have enjoyed a three-decade bull rally.

“Fears of a rush for the exits from the U.S. bond market have been greatly exaggerated,” Reuters reported Friday. “Even as the fixed-income sector grapples with a rare negative start to the year, many of the biggest and widely followed bond firms are still attracting new cash to their flagship funds. And it is not expected to stop any time soon.”

“I think the demand is there because many investors, especially mom-and-pop investors, still want income and, equally important, have been burned twice on equities,” said Jeffery Elswick, director of fixed income at Frost Investment Advisors, in the article. “They lost so much money, like in the double-digits, during the tech bust (2000-2002) and credit crisis in 2008 – and don’t want to go through that again.”

Safe havens

Investors have heard calls for the death of bonds for years now but it hasn’t happened. In fact, yields on the 10-year Treasury note fell back below 1.7% last week, and more weak economic data would only increase speculation the Federal Reserve will buy more bonds to keep rates low.

Fixed-income funds skippered by PIMCO’s Gross and other noted bond managers have profited from the recent pullback in Treasury yields and higher bond prices.

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