Bloomberg News

Corporate Bond Fund Inflows to Increase in 2012, Fitch Says

February 07, 2012

(Updates with 2011 fund flows in third paragraph.)

Feb. 7 (Bloomberg) -- European fixed-income investors will direct more money to corporate bond funds in 2012 as they seek higher yields, according to a Fitch Ratings survey.

“Fifty-eight percent of investors said they expect funds to turn to corporate credit in 2012 in search of carry,” said Monica Insoll, a managing director in Fitch’s credit market research group in London. “Only a small minority of 6 percent anticipate inflows into government bond funds -- a flight to quality.”

Investor optimism about the ability of euro-region governments to resolve the sovereign debt crisis will also probably boost flows into European corporate bond funds, Fitch said. Investors pulled 33 billion euros from euro bond funds in 2011, the ratings company said.

Fitch’s quarterly European Senior Fixed Income Investor Survey polled debt managers overseeing about $7.1 trillion of assets in total.

--Editors: Andrew Reierson, Paul Armstrong

To contact the reporter on this story: Katie Linsell in London at klinsell@bloomberg.net

To contact the editor responsible for this story: Paul Armstrong at parmstrong10@bloomberg.net


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