Investors May Be Growing Wary of Bonds

As the below chart shows, investors continued to favor bonds over equities as of October 15, 2010.

From The Blog of HORAN Capital Advisors

In November though, fund flows for bond investments turned negative.

From The Blog of HORAN Capital Advisors

Source: Wall Street Journal ($)

One type of bond investment that actually performed well in November was bank loan investments. In November, the broader category of bank loan investments did generate a positive return. Bank loan investments have floating rates and have historically delivered positive returns in rising interest rate environments as noted in the chart below.

From The Blog of HORAN Capital Advisors

Source: Eaton Vance (PDF)

Disclosure: HORAN Capital Advisors has a position in a bank loan investment for its clients.