Fixed-income fund flows grew in 2018 according to a report by Cerulli Associates that highlighted exchange-traded fund (ETF) and mutual fund flows last year.
A flight to safety was apparent as the major U.S. indexes were all racked by volatile market swings and sell-offs towards the end of the year.
The Dow fell 5.6 percent, the S&P 500 was down 6.2 percent and the Nasdaq fell 4 percent. It was the worst year for stocks since 2008 and only the second year the Dow and S&P 500 fell in the past decade.
December was a particularly dreadful month: The S&P 500 was down 9 percent and the Dow was down 8.7 percent — the worst December since 1931. In one seven-day stretch, the Dow fell by 350 points or more six times.
Per ThinkAdvisor, “The report also noted the move to fixed income protection, especially due to demographics, shouldn’t be a surprise. As baby boomers age, protecting bull-market gains is “paramount,” especially as the time horizon to retirement gets shorter.”
Pockets of Opportunity
According to the report, there were five areas in particular that saw organic growth:
1) Large blend and foreign large blend funds: This category saw net inflows of $221.8 billion, including active ETFs that saw $542.2 billion in flows.