Real money investors favour bonds over equities - G4 pension funds and insurance companies stepped up their buying of bonds in Q1 2010 and slowed their buying of equities to almost zero. As a result the gap between bond and equity buying widened sharply in Q1 2010. Pension funds and insurance companies continue to show a strong preference for bonds, a trend that began in 2003 and intensified post Lehman bankruptcy. Retail investors also continued to show a strong preference for bonds vs equities. YTD the pace of bond fund buying is similar to that seen in 2009 ($650bn), while the pace of equity fund buying slowed to half of last year ($250bn).
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