Bond ETF Report – Which ETFs and Sectors are gaining investment?

Bond ETFs Gain Money With The Strongest Inflows of Last 3 Months

(May 25th, 2012) Bond ETFs continued to gain funds in April, with net inflows (deposits minus withdrawals) of $4.6 Billion in April. This is an increase of $0.7  billion over March. ETF investors also favored bond ETFs over stock ETFs. While bond ETFs gained $4.3 billion, stock ETFs lost $2.0 billion.

During April, stock prices were very choppy but ended close to where they began. However, there was a major move in Treasury Bond yields in April with the 10 year falling from 2.23% to 1.95%, dramatically causing bond prices and Bond ETFs to rise in value

Hotest Bond ETF Sector: Intermediate Investment-Grade

Hotest Bond ETFs: Vanguard Total Bond Market ETF (BND)

The sector which had the highest net inflow was Intermediate Investment, Grade which had net inflows of  $1.4 billion.  In a distant second and third place were  Emerging Market Debt (+$685 Million) and High Current Yield (+$434 Million) ETF Categories. In terms of outflows, investors were on taking money out general US Treasury ETFs with net outflows of $233 Million.

Vanguard Total Bond Fund ETF had net inflows of $248 Million. BND was up 0.99% in April versus -0.43% in March.

Investors Slightly Favored Short and Intermediate Over Long Term ETFs

Investors put more than $2.4 billion into short and intermediate bond ETFs versus $1.9 billion in long term ETFs. This marks a major reversal from the previous month where investors put 3 times as much into long-term bond etfs as short and intermediate.

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