Dangling 5% yields Bond powerhouses including Pimco, BlackRock and Capital Group are dangling the prospect of 5% yields to lure investors into actively managed fixed-income funds. The pitch appears to be working: about $90 billion flowed into active bond funds in the first quarter, the most for any three-month period since mid-2021. Fund managers see a window of opportunity for investors to lock in yields before the Federal Reserve cuts interest rates — even if the prospect of that happening gets more distant by the week. “Investors are getting the best compensation on fixed income in 20 years,” according to Ryan Murphy, head of fixed-income business development at Capital Group.

Markets on edge Treasuries are up and S&P 500 futures are dropping as investors try to discern the rapidly developing situation in the Middle East. The market reaction was stronger initially when US officials said Israel had struck targets in Iran, though the flight-to-safety has since eased in Friday’s trading. That’s after officials in Tehran downplayed the incident and sought to allay concerns of further escalation from Iran, where state media said an attempted Israeli drone strike had failed. The dollar is now flat, for example, Bitcoin has rebounded and oil has erased much of the morning’s spike. Investors were already nervous heading into today’s session, pulling money out of stock funds yet again and taking outflows to more than $21 billion in two weeks, says the team at Bank of America. A senior Barclays banker predicts the flight from risk assets will continue.