Bloomberg Fixed-Income ETF Tracker

Bond ETF Investors Added Riskier Debt Before Fed's Rate Cut

Updated:

Investors in debt exchange-traded funds yanked cash from Treasuries to boost their exposure to riskier bonds before the Federal Reserve cut interest rates for the first time in a decade.

ETFs that buy government securities lost more than $390 million in July, their first outflow since March, according to data compiled by Bloomberg. Flows into strategies that hold investment-grade bonds slowed to less than a quarter of the total for the previous month, while ETFs tracking debt maturing in more than 10 years took in the least since March.

Instead, investors added $1.8 billion to funds that buy company bonds. High-yielding debt also got a bid for a second consecutive month, while funds tracking convertible bonds took in $94 million, the most in a year.

Bloomberg’s Fixed-Income ETF tracker monitors weekly fund flows to provide a gauge of investor sentiment.

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