According to figures compiled for FTfm by data provider Morningstar, in the first half of this year, bond funds attracted more than $355 billion, against $375 billion for the whole of 2016. The surge, which was recorded despite procedures by central banks to standardize monetary policy, marks investors’ interest in fixed-income funds.

The net figure recorded at the end of May exceeds that of 2013 and 2015 combined. According to experts, long term investors turned towards bond funds as an inflation hedge. In addition, low benchmark rates pushed them to the bond market.

However, many show concern regarding the second half of 2017, as multiple central banks – US, Canada, or even Egypt and South Africa in Africa - are raising their benchmark rates. Concerns well justified, more so since the European Central Bank said it could change its monetary policy, likely bringing down bond rates.

Finally, the end of the 10-year quantitative easing programme launched after the 2008 crisis to restart economies is nearing layering over the bond market a dark cloud.

Fiacre E. Kakpo