Gekko

REGULAR readers may have noticed that I regard the bond market with a speculator’s jaundiced eye rather than an investor’s serious commitment. What else would you expect of a cynical New York cosmopolite? But it seems that solid Middle America takes the same view.

The Investment Company Institute, the lobby for the mutual-fund business, tracks flows into the various fund categories, and the latest numbers tell a sad story about the bond world. From October 1993, when mutual-fund assets first went over $2 trillion, to this February, when they topped $3 trillion, bond-fund assets dropped from $574 billion to $554 billion. In other words, small investors, the backbone of the market, decided that their ride on the yield curve was over. Their place was taken by foreign central banks and leveraged speculators.

JD

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John Dizard

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REGULAR readers may have noticed that I regard the bond market with a speculator’s jaundiced eye rather than an investor’s serious commitment. What else would you expect of a cynical New York cosmopolite? But it seems that solid Middle America takes the same view.

The Investment Company Institute, the lobby for the mutual-fund business, tracks flows into the various fund categories, and the latest numbers tell a sad story about the bond world. From October 1993, when mutual-fund assets first went over $2 trillion, to this February, when they topped $3 trillion, bond-fund assets dropped from $574 billion to $554 billion. In other words, small investors, the backbone of the market, decided that their ride on the yield curve was over. Their place was taken by foreign central banks and leveraged speculators.