Tuesday, July 9, 2013

Retail fixed income investor capitulation

Spooked retail investors are exhibiting complete capitulation in their bond portfolios. They have been dumping fixed income assets, particularly munis, in record amounts.

Source: DB

And the proceeds are ending up in money market funds - while institutions are reducing their overall money market funds holdings.

$mm (source ICI)

Are US retail investors overreacting to "taper" talk? For those who like to take contrarian bets, this looks like an opportunity.

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