Individual investors, who hold more sway over the corporate bond market than ever, are allocating the least amount of cash this year to U.S. high-yield mutual funds in a signal that sentiment may be shifting.
Speculative-grade bond funds reported net inflows of $75 million through April 16, the lowest since a monthly outflow of $9.1 million in December, according to EPFR Global data. U.S. mutual funds reported an unprecedented $698.3 billion of corporate bond assets at the end of February, from $327.9 billion in 2008, data compiled by the Investment Company Institute show.
Consumers have seized unprecedented control of the market for company debt as Federal Reserve data show ownership falling to almost a 10-year low and as trading as a portion of total bonds outstanding declines worldwide. Concern is mounting that a reversal of the stampede into the securities would undermine a market that's gained 54 percent since the end of 2008, Bank of America Merrill Lynch index data show.
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