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Mutual Funds Driving Corporate Bond Prices Higher

According to a recent article in Bloomberg, mutual funds purchased $275 billion worth of high quality corporate bonds in 2015.  Analysts at Deutsche Bank quoted in the article report that those purchases represented twice the credit supply available last year.  As a result, the analysts report that bond funds have experienced strong performance – with 18 of the 20 funds tracked by Deutsche Bank outperforming the index over the past three months.  In addition, mutual fund allocations to corporate bonds reached an all-time high last week, at 36.3%.