Investors piled into bond funds last month, pouring $18.2bn into bonds as inflation cooled and interest rate cuts continue to loom.
Overall, however, mutual funds still shed $39.4bn in July, its second highest monthly outflows of 2024, owing to large outflows from equities, according to data from Morningstar Direct. Passive funds also shed money (-$2.9bn) for the first time this year, while active funds continued its outflows trajectory, dropping $36.5bn.
But bond mutual funds of all flavors took in money; taxable bonds rebounded, netting $14.7bn, after collecting only $2.6bn in June, its lowest take-home for the year. Municipal bonds had their second highest inflows year-to-date, raking $3.5bn. Inflows were relatively balanced across Morningstar bond categories with High Yield Bonds gathering the highest at $4.3bn.