US bond funds attract $625B in inflows through August, highest since 2010

US bond funds: US bond funds are mutual funds and exchange-traded funds that invest in government, corporate, municipal, or other fixed-income securities. They are central to the reported shift toward fixed income, as investors have continued adding money despite pressure on existing bond prices from rising yields. Investor trend: Higher yields have made newly issued bonds more attractive for income-seeking investors, even though rising yields reduce the market value of bonds already held. Retail exposure: Many retail investors hold bond funds indirectly through retirement products such as target-date funds, where bonds generally become a larger allocation as the investor approaches retirement. Portfolio allocation: Financial advisers have described the bond-market selloff as a potential rebalancing opportunity for investors whose portfolios have become heavily concentrated in stocks.