Capital Markets: Observations & Insights

IV

Chasing Yield and Pursuing Safety Lending vs. Owning

• Despite very low interest rates, investors have been allocating away from equities and into bonds as well as cash

I

II

Investors Have Plowed Money into Bonds

…And into Cash

1,600

Stocks

Bonds

1,400

1,200

III

1,200

1,000

1,000

800

800

600

IV

600

400

($ billions)

($ billions)

400

200

200

Cumulative Fund Flow

V

0

Retail Money Market Funds

0

Jun-17

Jun-18

Jun-19

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

Mar-17

Mar-18

Mar-19

Dec-16

Dec-17

Dec-18

Dec-19

Sep-17

Sep-18

Sep-19

VI

Source: Morningstar, Investment Company Institute, Alger. Bond flows include taxable and municipals and stock flows include U.S. equity and international equity—all include passive and ETF flows.

17