Mutual Fund Buzz for July 30: Investors Still Favor Bond Funds

Bonds see continued inflows while some commodities funds brace for more possible regulation.

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Investors still trust the safety of bond funds. June was another good month for fixed income. The Investment Company Institute reported that overall, mutual funds saw net inflows, mostly into bond funds. Bond funds experienced inflows of more than $20 billion—up about $6 billion from May. Meanwhile, stock funds saw more outflows. The WSJ reports that investors haven't consistently put money into stock funds since the market hit its low in March 2009. Low-yielding money market funds also continued to see outflows, which brings their total outflows for the year to more than $500 billion.

Wall Street Journal : Mutual Funds Gained Assets, Thanks to Bonds

[See When Choosing a Bond Fund, Keep These Factors in Mind from U.S. News.]

If you own a commodities fund that invests in futures contracts, you may want to take note of an article published Thursday by Investment News. Commodities funds are already regulated by the Securities and Exchange Commission, but there's now a push by the National Futures Association to require them to register with the Commodity Futures Trading Commission. The article details how costly further regulation could be for mutual funds and how the SEC and CFTC have different rules that sometimes conflict with each other.

Marketwatch highlights precious metals funds' latest struggles. As concerns about global uncertainty have tapered off, so have investments in precious metals funds, which generally see huge inflows when investors get nervous about the overall market. Precious metals mutual funds lost almost 9 percent in July, according to Marketwatch.

Investment News: Commodities funds brace for regulatory 'confusion'

Marketwatch: Gold Bugs Get Swatted

[See What Gold Can (and Can't) Do for You from U.S. News.]

Finally, a feel-good story for the weekend. You've probably never heard of the Valley Forge fund, a large-value fund with about $15 million in assets under management. It's run by 89-year-old Bernard Klawans, who has never had any formal training in finance or money management. He says he's simply a retired aerospace engineer who enjoys managing money. The fund has beaten most of the competition over the past 10 years and is now U.S. News's top-ranked large-value fund.

[See How A One-Man Fund Beat All the Rest from U.S. News.]