The outperformance in corporate bonds compared to U.S. equities is attributed to the concerns about the strength of U.S. growth and geopolitical uncertainty in the Crimea peninsula, especially among European investors who sought U.S. debt as a safer bet with heightened volatility in other foreign markets.
Consequently, investors pushed $20.3 billion into U.S. investment-grade funds and $3.1 billion into high-yield corporate bond funds over the first quarter, marking the first net inflow into debt funds since the first quarter of 2013.
Additionally, the dip in benchmark 10-year Treasury yields to 2.76% from 3% at the end of last year helped support demand for fixed-income assets.
For more information on corporate debt, visit our corporate bonds category.
Max Chen contributed to this article.
Full disclosure: Tom Lydon’s clients own shares of LQD, HYG, and JNK.