- After three years of exceedingly strong net flows, market conditions and the interest rate environment have inverted flows for both taxable and municipal fixed-income products.
- Taxable bond open-end funds and ETFs dropped from a three-year average rate of nearly $470 billion in inflows to outflows of $147 billion through July 2022.
- On the muni side, net flows have not only fallen into the red in 2022, but are on track to negatively match the level of inflows over the past few years with the National Intermediate and Short-Term categories accounting for over 50% of the reversal in flows.
- As the Federal Reserve maintains its hawkish stance on inflation and equities come off a summer rebound, it will be interesting to see how fixed-income products finish the year.
Fixed Income Net Flows ($Billion)
Source: Morningstar (OE & ETF, excluding FOF)