A recent FT article focuses on global mutual fund flows. It caught me by surprise to see the significant flows into bonds. This was supposed to be the ongoing period of the Great Rotation. The flows do not show a rotation but just a grab for yield and this is the problem for the economy. This grab for yield creates the credit bubble we are currently seeing. Central banks want the movement into risk assets to boost the economy, but not just a switch to yield out the curve.
The flows to passive equity could be investors just being wise the poor performance of active management but it is also another indication that there is a grab for risky assets and yield.
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