The big move in bonds may be over

|By:, SA News Editor

There are four key points writes ukarlewitz in The Fat Pitch:

Retail and professionals have already made a big move out of fixed income. Trim Tabs estimates bond fund and ETF outflows in August will be the 4th largest ever - nearly 3% of assets have left in 3 months. Individual investors' holdings of bonds fell in July to a 4-year low and are likely lower now. For professionals, a BAML survey has 97% believing yields will be higher a year from now.

Fund manager weightings are at the bottom of a long-term range. A further big move down would be unprecedented. 57% are underweight bonds, the highest since the 2011 bottom in bond prices.

The recent change in yields looks to be out of proportion to actual economic data. The market is behaving as if the economy is at a 1987, 1995, or 2004 inflection point where unemployment falls low enough to send rates shooting higher. It just isn't so yet.

Bond yields are close to stabilizing or maybe turning lower - positive not just for TLT, but for other yield assets like dividend stocks (DVY), and mortgage REITs (REM).

Long-duration Treasury ETFs: TLH, TLT, IEF, DTYL, DLBL, ILTB, TENZ, ITE, TLO, EDV, VGIT, VGLT, TMF, TYD, LBND, UBT, UST, TMV, TYO, DSTJ, DSXJ, SBND, PST, TBT, DTYS, DLBS, TBF, TTT, TYNS, TYBS, TBX.

Dividend ETFs: FDL, FVD, MDIV, QDF, QDYN, QDEF, DIV, CVY, DVY, HDV, IYLD, PEY, PFM, SCHD, SDY, SDYL, DVYL, VYM, DHS, DTD, SYLD, KBWD, SPHD, DLN, DON, HILO.

Mortgage REIT ETFs: MORT, MORL.