As Loomis, Sayles Vice Chairman Dan Fuss told MME last month: “When interest rates eventually rise, it will become our entire focus. I’ve prepared for this well in advance “(see “Fuss: Interest Rate Policy Will Shape Recovery,” MME 5/3/2010).

A record-setting $375 billion flowed into the $2.2 trillion bond fund industry in 2009, while equity fund assets lost $40 billion last year, to end at $3.7 trillion. Those gushing inflows from unnerved investors and a growing consensus the Fed will take the unusual move of lifting interest rates for several years, could lead to lower values for what appears to be safe, long-term fixed income.

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