Fixed-income funds held their siren-like draw for investors, contributing largely to long-term mutual funds’ $16.8 billion in inflows in August, according to a Morningstar analysis.
“People are still very focused on bond funds,” says Russ Kinnel, director of fund research at Morningstar. It’s not really a bubble, because unlike in the past where investors have bet the farm on risky investments, they’re now pouring money into high-quality debt, although Kinnel notes that these funds’ low-return potential will eventually come back to haunt investors.
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