As global government bond yields slipped deeper into the red, investors piled into relatively more attractive yield-generating U.S. corporate bond exchange traded funds.
Global bond funds attracted $14.4 billion in net inflows, with U.S. bonds receiving $7.8 billion, over the past week, reports Joe Rennison for the Financial Times.
The sudden influx into U.S. fixed-income funds is seen as a result of the recent fall off in global yields, which has made yields in U.S. assets relatively more attractive – some $12 trillion in global debt now trades with negative yields.
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“It is very evident that the incremental marginal buyer in corporate credit is an Asian-based buyer,” Jason Shoup, senior portfolio manager at LGIMA, told the Financial Times. “We come in each day and hear colour about how Asian accounts have been buying and that impacts how bonds trade in the US … It’s very different from how we have become accustomed to thinking about our markets since the financial crisis.”
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