For high-yield bond investors, March has been the cruelest month. First oil prices – often linked to bond prices – took a dive, from $54/bbl to $48 in just three weeks. Then last week the Fed hiked interest rates, and signaled they weren’t done by a long shot. That combination of happenings compelled junk buyers to flee from retail funds to the tune of $5.68 billion last week.

As our Chart of the Week depicts, $8 billion in investor cash has departed from these funds so far this month. In contrast, retail loan funds have seen eighteen weeks of consecutive in-flows. During that period – since November 9 -more than $18 billion of cash has moved into floating rate assets.

In this special series comparing loans and bonds we’ve examined their relative yields, credit and interest rate risks, and sensitivity to market moves and business cycles. Let’s look finally at duration risk and how well these instruments meet the long-term goals of their constituents.

Bonds are by definition long-term investments, typically ten years for non-investment grade issuers, and up to a century for the highest quality corporates. They also contain non-call provisions protecting investors from refinance risk. But depending on the rate environment and outlook, locking up your money that long can be a boon or a bear.