U.S. bond ETF flows rise sharply year-over-year, driven by demand for real yields and multi-sector income strategies.
Investors poured capital into U.S. bond ETFs at a 60% higher rate than last year, signaling strong demand for fixed-income yield amid stock market volatility. The surge reflects a hunt for real yields, adjusted for inflation, as rates fluctuate under new Fed leadership.
Treasuries and multi-sector income ETFs saw the largest inflows, with investors prioritizing income per unit of duration. BlackRock executives noted the trend underscores confidence in enduring income opportunities tied to economic growth and productivity gains.
The shift comes as markets adjust to a complex inflation environment and expectations of Fed policy shifts. Real yields, seen as a proxy for growth, are attracting attention amid the AI-driven productivity narrative.