The June issue of our Bond Fund Intelligence, which was sent to subscribers Tuesday morning, features the lead story, "Bond Fund Outflows Continue, Accelerate 5th Straight Month," which reviews the continued slide in assets; and, "ICI's 2022 Fact Book Reviews '21 Bond Fund Trends, Flows," which quotes from the Investment Company Institute's annual statistical update. BFI also recaps the latest Bond Fund News and includes our Crane BFI Indexes, which show that bond fund returns rebounded in May while yields rose for the 8th straight month. We excerpt from the new issue below. (Contact us if you'd like to see our latest Bond Fund Intelligence and BFI XLS spreadsheet, or our Bond Fund Portfolio Holdings data.)

Our "Bond Fund Outflows" piece reads, "Bond funds saw outflows for a 5th straight month and saw assets fall for a 6th straight month in May. Total assets declined by $42.8 billion to $2.898 trillion last month, according to our Bond Fund Intelligence. YTD, assets are down $426.9 billion (through 5/31/22), and over 1-year they've fallen by $383.2, or 11.7%."

It continues, "Though outflows paused in early June, we expect the ugliness to resume shortly. ICI's 'Combined Estimated Long-Term Fund Flows and ETF Net Issuance' (with data as of June 1) says, 'Bond funds had estimated inflows of $652 million for the week, compared to estimated outflows of $9.84 billion during the previous week. Taxable bond funds saw estimated outflows of $1.26 billion, and municipal bond funds had estimated inflows of $1.91 billion.' Over 5 weeks, bond funds and ETFs saw outflows of $54.7B."

Our "Fact Book" piece states, “The ICI recently published its '2022 Investment Company Fact Book,' which contains a review of the bond fund marketplace in 2021 and a wealth of statistics on bond funds. They write, 'In 2021, demand for bond funds increased across all regions. In the United States, net sales of bond funds were $700 billion in 2021, up from $552 billion in 2020; in Europe, net sales were $172 billion in 2021, up from $122 billion in 2020; and in the Asia-Pacific region, net sales were $207 billion in 2021, up from $58 billion in 2020. Bond funds for the rest of the world received net inflows of $115 billion in 2021 following net outflows of $4 billion in 2020."

It continues, "ICI tells us, '`Combined net sales of bond funds and mixed/other funds have generally been strong over the past decade, usually outpacing net sales of equity funds. This trend can partially be explained by the aging global population.... Because returns on bonds tend to be less variable than those on stocks, returns on bond funds and some mixed/other funds that hold substantial proportions of their total net assets in bonds also tend to be less variable than those of equity funds."

Our first News brief, "Returns Rebound; Yields Keep Rising," says, "Bond fund returns rose after 4 months of sharp declines, but yields rose for the 8th month in a row in May. Our BFI Total Index rose 0.24% over 1-month but fell 5.61% over 12 months. The BFI 100 returned 0.29% in May and -5.88% over 1-year. Our BFI Conservative Ultra-Short Index was up 0.08% for 1-month but down 0.66% for 1-year; Ultra-Shorts declined 0.12% and 1.45%, respectively. Short-Term returned 0.19% and -3.63%, and Intm-Term rose 0.27% in May but fell 7.33% over 1-year. BFI's Long-Term Index rose 0.13% but fell 9.34%. High Yield fell 0.47% in May and 4.16% over 1-year."

A second News brief, "DoubleLine Liquidating Ultra-Short BF," explains, "An SEC filing for the DoubleLine Ultra Short Bond Fund tells us, 'The Board of Trustees of DoubleLine Funds Trust has approved a plan of liquidation for the Fund. The liquidation of the Fund is expected to take place on or about July 29, 2022. Effective after the close of business on June 14, 2022, the Fund's shares will no longer be available for purchase by new investors or existing investors."

We also write, "Morningstar says, 'Fixed-Income Funds Headline Positive ETF Flows in May.'" The article tells us, "After their first month of outflows since 2018 in April, U.S. exchange-traded funds rebounded with $66.6 billion of inflows in May. Stock ETFs course-corrected, adding $32.6 billion of new money. But it was fixed-income funds that led the way. The $33.4 billion they collected last month exceeded their haul over the previous four months combined.... It was a smoother run for the Morningstar U.S. Core Bond Index, a portfolio of U.S. government bonds and investment-grade corporate debt, whose 0.53% return snapped a streak of five consecutive months of losses. The index is still down 8.97% for the YTD -- its worst start to a year in 22-plus years of recorded performance."

Yet another News brief is: "Pimco Writes on 'Navigating the End of the Bond Bull Market." They comment, "For many of the most seasoned professionals in the bond market, it feels like the end of an era. After a boom that has lasted at least three decades, the warning signs are everywhere. The highest levels of inflation in a generation and rising interest rates mean that yields are increasing, so bond investors can no longer assume the value of their holdings will automatically increase year on year."

A BFI sidebar, "NY Fed Blogs on Volatility," states, "The Federal Reserve Bank of New York's Liberty Street Economics blog asks, "How Is the Corporate Bond Market Responding to Financial Market Volatility?" They write, "The Russian invasion of Ukraine increased uncertainty around the world. Although most U.S. companies have limited direct exposure to Ukrainian and Russian trading partners, increased global uncertainty may still have an indirect effect on funding conditions through tightening financial conditions. In this post, we examine how conditions in the U.S. corporate bond market have evolved since the start of the year through the lens of the U.S. Corporate Bond Market Distress Index."

Finally, another sidebar is "PIMCO, PGIM Launch Funds." It says, "PIMCO Adds New ETF to Actively Managed Fixed Income Suite" says a press release. It tells us, "PIMCO ... is expanding its actively managed fixed income exchange-traded fund suite with the addition of a new ETF that may help diversify fixed income allocations for investors concerned about rising rates."

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