The October issue of our Bond Fund Intelligence, which will be sent to subscribers Thursday a.m., features the articles, "Worldwide BF Assets Jump to $17.7 Tril., Led by US & China," which reviews the latest global bond fund market asset totals; and "European MFS Hosts Panel on Ultra-Short Bond Funds, ETFs," which excerpts from a recent panel on European ultra-short bond funds and ETFs. BFI also recaps the latest Bond Fund News and includes our Crane BFI Indexes, which show that bond fund returns had their worst month since Sept. 2022 in August while yields jumped. 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.)
BFI's lead article states, "Bond fund assets worldwide increased in the latest quarter to $17.65 trillion, led higher by the five largest bond fund markets -- the U.S., China, Luxembourg, Ireland and Brazil. We review the ICI's 'Worldwide Regulated Open-End Fund Assets and Flows, Second Quarter 2026' release and statistics below."
It continues, "ICI says, 'Worldwide regulated open-end fund assets, excluding funds of funds, increased 9.0% to $95.20 trillion at the end of the second quarter of 2026... The Investment Company Institute compiles worldwide regulated open-end fund statistics on behalf of the International Investment Funds Association (IIFA).'"
Our "EMFS" article states, "Crane Data hosted its latest European Money Fund Symposium conference in Paris late last month, where a record 250 money market professionals discussed rates, tokenization, record asset levels and a number of other hot topics in 'offshore' cash. The closing session of Day 1, 'Ultra-Short Bond Funds, ETF MMFs & Alt-Cash,' featured Warren Clayton-Howe of Invesco, Neil Hutchison of J.P. Morgan A.M., and Sara Malinowsky of Fitch Ratings. Hutchison says, 'I'd say the uncertainty that we're seeing in the market is also an opportunity.... We sat through so many years of negative yields in Europe. I think having entry-level and yield levels achievable like they are right now with an upwardly sloping yield curve is great.'"
The article says, "He continues, 'I think part of the reason for the growth of our asset class broadly is the yields that are achievable and certainly the curve shape. It's not easy. After so many years of forward guidance and negative rates, having a bit of rates volatility but yields ... is exciting for the portfolio managers. We can show what we can do as a relative business.... I'd also say this is the first one I've been to where ESG was less of an issue.'"
Our first News brief, "Returns Plunge in August, Yields Jump," states, "Bond fund returns had their worst month since Sept. 2022 in August while yields jumped. Our BFI Total Index fell 2.20% over 1-month and rose just 0.09% over 12 months. (Money funds rose 3.62% over 1-year as measured by our Crane 100 Index.) The BFI 100 fell 2.25% in August and fell 0.37% over 12 mos. Our BFI Conservative Ultra-Short Index was down 0.01% over 1-month and up 3.59% for 1-year; Ultra-Shorts fell 0.07% and rose 3.50%. Short-Term fell 0.96% and rose 1.59%, and Intm-Term plummeted 2.78% in August and fell 1.62% over 12 mos. BFI's Long-Term Index was down 3.15% and 2.65%. High Yield fell 2.06% in August but rose 1.89% over 12 months."
A second News brief, "Reuters Writes 'US Treasury Yields are ‘Screaming Good Value’ says PIMCO Senior Advisor,’ quoting PIMCO Senior Advisor Rupert Harrison, ‘When you have seen this run up in yields, this is screaming good value to us.’ Reuters adds that PIMCO has exposure to duration, with Harrison noting that 'bond markets could offer value in the event of a tech-stock selloff or a future economic slowdown.'"
Our third brief says, "Barron's on 'Fund Winners and Losers: Bitcoin Battered Bonds in the Third Quarter.' They state, 'Bitcoin funds won the third quarter, and bond funds lost -- even as stocks kept going up. Bonds are a portfolio's ballast, but their bête noire is rising interest rates, which have surged because of inflation from the Iran war and years of deficit spending. The $399 billion Vanguard Total Bond Market exchange-traded fund fell 3.4% in the quarter, just edging out the 3.5% average fund loss in Morningstar's intermediate core bond category.'"
A BFI sidebar, "Big Bond Fund Managers Talk," states, "Reuters tells us, 'How the World's Biggest Bond Managers Are Investing in a Tumultuous Market.’ It says, 'A tumultuous ride for bonds this year has left Vanguard's senior bond fund manager Arvind Narayan with one unequivocal message: 'This is not the time to be a hero.’ Narayan, who co-heads a $55 billion bond fund, is one of eight of the largest US bond fund managers with whom Reuters spoke, collectively managing nearly $700 billion. Many of them say they are avoiding big macro bets and instead hunting carefully for higher-quality investments.'"
Finally, another sidebar, "Less Duration Is More," states, "Federated Hermes writes, 'With a flatter curve, less duration can be more.' The brief explains, ‘Higher long-term bond yields have made the headlines, but the short end has also risen sharply. This gives investors historically attractive yields across the curve.'"
