This paper employs data on corporate bond mutual fund flows to investigate bond investments under low interest rates …. In response to the Fed’s lower interest rate policy, we find that investment-grade bond funds receive inflows, while high …-yield bond funds are not responsive. This result can not be explained by investors’ incentive to reach for yield, but by the …

This paper studies the role of mutual fund yield in driving investor flows and performance of bond funds. Using two … common measures, the SEC yield and 12-month distribution yield, we find strong evidence that investors tend to chase bond … funds with higher yields, even after controlling for total fund returns and fund ratings. Although bond funds with higher …