June 14 (Reuters) – Investors are pouring money into bond-focused U.S. exchange traded funds, and some industry participants believe inflows could hit records in 2024 if the current pace continues.
U.S. bond ETFs have taken in a net $109 billion this year as of Thursday, data from Morningstar Direct showed. Flows into the category could total a record $250 billion this year, beating the record of $210 billion set in 2020, Morningstar said.
While bond ETFs make up less than 18% of the entire ETF market based on assets under management, they have received 29% of all year-to-date inflows, the firm’s data showed.
“Bond ETFs are punching above their weight,” said Bryan Armour, ETF analyst at Morningstar.
Bond yields have shot higher in recent years as the Federal Reserve raised rates to combat surging inflation, raising the allure of bond funds to income-seeking investors. The central bank earlier this week reiterated its cautious…
