Bond inventories: A sign of the times

Conditions in the bond market have evolved significantly since the end of the so-called Great Recession.

Are you prepared for today’s bond market?

Despite many gloomy predictions, bonds have continued to draw intense investor interest in the years since the financial crisis ended. Importantly, however, the makeup of the bond market has shifted significantly in that time frame. In fact, since November 2007, mutual funds have increased their bond holdings by 71% while dealer inventories have been depleted by 76%. While the U.S. bond market is large, this shift illustrates the magnitude of the bond market’s multiyear run and shows that bond holdings at key liquidity providers have declined to very low levels.

While this trend could have negative implications for bond pricing going forward, it clearly demonstrates the importance of thorough credit research — such as that employed by the Fixed Income team at Delaware Investments — when seeking the most liquid investment solutions in today’s bond market.

Learn more about our bottom-up (bond-by-bond) portfolio construction process and risk-aware investment approach across both taxable and municipal fixed income markets.

Bond inventories: A sign of the times

The amount of bonds (in billions of dollars) held by mutual funds versus those held by dealer firms as of December 2012

Data: Citigroup via Dow Jones. Data represent corporate bonds. Most recent data available. 

Chart above is for illustrative purposes only and is not representative of the performance of any specific investment. Past performance does not guarantee future results.

Carefully consider the Funds' investment objectives, risk factors, charges, and expenses before investing. This and other information can be found in the Funds' prospectuses and their summary prospectuses, which may be obtained by visiting the fund literature page or calling 800 523-1918. Investors should read the prospectus and the summary prospectus carefully before investing.


Investing involves risk, including the possible loss of principal.

Fixed income securities can lose value, and investors can lose principal, as interest rates rise. They also may be affected by economic conditions that hinder a issuer’s ability to make interest and principal payments on its debt.

The Fund may also be subject to prepayment risk, the risk that the principal of a fixed income security that is held by the Fund may be prepaid prior to maturity, potentially forcing the Fund to reinvest that money at a lower interest rate.

Not FDIC Insured | No Bank Guarantee | May Lose Value