For example, noted bond fund manager Jeffrey Gundlach made waves last month when he reversed his once-bearish stance on Treasury bonds. “I bought more long-term Treasuries in the last month than I’ve bought in four years,” Gundlach said in a report from early March. [Risk-Free? — Treasury, High-Yield Bond ETFs Diverge]
First-quarter flows in bond ETFs illustrate that investors aren’t exactly running for the exits. Global fixed-income ETF inflows were $11.6 billion, marking the eighth consecutive quarter with inflows of at least $10 billion, according to BlackRock. [A Record-Setting First Quarter for ETFs]
Within fixed-income ETFs, Zacks Investment Research notes that short-term bond funds have been very popular lately.
If short-term bond ETFs are being used as safe havens, “this space can witness even more asset accumulation going forward,” according to Zacks. “This could be especially true if anxiety over lofty equity levels continues, or if a broader market pullback materializes, thereby increasing demand for these lower risk ETFs.”
Vanguard Short-Term Bond (NYSEArca: BSV) has gathered net inflows of nearly $2.2 billion year to date, placing it fifth on the sales list for all ETFs, according to IndexUniverse data.
PIMCO Total Return ETF
Full disclosure: Tom Lydon’s clients own TLT.
Story updated to correct inflows for BOND.