According to research by AMG Data Services for the week ending May 7, U.S. junk bond mutual funds brought in $1.3 billion, extending an already record-breaking rally.

When speaking to Reuters, Joel Friedman, director of funds research for Standard & Poor’s, stated, "Investors are looking for a better alternative. They don’t want to get less than 1% in a money market fund. Equities have been risky and negative for a while, so they’re looking for alternatives and are willing to accept a higher degree of risk."

However, Junk bond inflows could wane if the stock market’s performance improves, attracting cash back into that market, Friedman said.

According to Merrill Lynch, junk bonds enjoyed their best performance in more than 10 years in the first quarter, returning 7.14%, the highest since 7.48% in the first quarter of 1992.

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The staff of Mutual Fund Market News ("MFMN") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MFMN, and have not prepared, sponsored, endorsed, or approved these summaries.

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