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Monday, December 6, 2010

No Surprise For Me in this Report

my post of Nov 29

Next Asset Class For the "Dumb Money" to Flee: International Bond Funds ?

While some are voicing concerns about retail investors soon fleeing corporate and high yield bonds my view is that the next asset class to see the outflow is foreign bond funds. Investors flocked into this asset class in search of higher yields and I have never liked this asset class. Specidfically I argued that investors were better off in emerging  market bonds and stocks.

WSJ today
Money left bond mutual funds in the two weeks through Nov. 23, according to the Investment Company Institute, the first outflows since December 2008, roughly when the bond bull market began.
Even seemingly bulletproof emerging markets have suffered bond-fund outflows for two straight weeks, according to data tracker EPFR Global.

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