By Patturaja Murugaboopathy
(Reuters) – Investors are flocking to U.S. medium-term government bond funds and helping push their assets to record highs, as uncertainty about the Federal Reserve’s policy path prompts them to seek the sweet spot between income and protection.
According to Morningstar Direct data, U.S. medium-term government bond funds, which include Treasuries and debt issued by government-linked agencies, attracted $9.8 billion in the first two months of this year. That compared with just $2.3 billion for long-term government funds and an outflow of $3.5 billion from short-term government bond funds.
Assets under management (AUM) at U.S. medium-term government bond funds stood at a record $252 billion at the end of February, up 2% this year, the data showed. By contrast, the AUM at U.S. short-term and long-term government bond had dropped 3.8% and 2.7% to $93.4 billion and $158.3 billion respectively.
The rush into medium…
