Global bond boom is under way, says Morningstar

Investors have allocated more than €50bn of new assets to long-term funds in the first quarter of 2012, says Morningstar.

More than 70% of these inflows went to fixed income funds, while equity funds saw small inflows, and net redemptions in March. The largest inflows in fixed income were to corporate debt, corporate high yield and emerging markets.

Dan Lefkovitz, from Morningstar’s European research team, said: “A global bond boom is on. But recent European flows to bond funds should not be interpreted as a vote of confidence in the Eurozone. Investors are clearly differentiating between troubled governments and profitable corporations, and between the indebted West and cash-flush emerging markets.”

Long-term equity funds saw a mildly positive quarter, attracting just over €2bn in inflows. Emerging-markets and income-oriented funds were favoured. Global emerging markets allocation was the fastest-growing category of meaningful size, seeing quarterly organic growth in inflows of 34%.

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