##  [# 2026 Investing: Money Markets Are Out, Bonds Are In](/sections/bonds/2026-investing-money-markets-are-out-bonds-are) 

 

# 2026 Investing: Money Markets Are Out, Bonds Are In

 

 

Is the "year of fixed income" finally here? Industry experts debate whether record-breaking ETF flows are a structural shift or just a rebalancing act as investors migrate from money markets to active fixed income and duration plays.



 

 

 

 

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[By ETF.com Staff](/contributors/etfcom-staff)

 Jan 29, 2026

 Edited by: ETF.com Staff

 

 

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Is the "year of fixed income" finally, genuinely here? ETF.com's Dave Nadig and Sumit Roy were joined by Nate Geraci, President of NovaDius Wealth management and Host of ETF Prime; Kirsten Chang, Senior Industry Analyst at TMX VettaFi; and Mike Akins, Founding Partner of ETF Action, to discuss the fixed income outlook this year on a recent ETF Zoo episode. To see the episode in its entirety, go [**here**](https://www.etf.com/sections/podcasts/etf-zoo-2026-finally-year-global-equity).

## Transcript

**Akins:** I don't disagree with either of your calls, international having a record and fixed income having a record this year. But I think we need to start putting some guardrails around flows and records because every year, every category has a record in ETFs, right?

**Nadig:** Let's shift then because the other side of that is the bond trade, honestly, if we're to be talking about the dollar. And again, I think almost all of us have probably written something about this in the last little while here. The bond trade has been wild. Todd's not here, but we'll steal his chart from him. Like, this is a great example of what we're seeing here. We've had this spike in money market assets. We've got, you know, yields are starting to come back up again. Like, is this the year that we see a huge move back into fixed income?

**Chang:** Well, I've said for some time that we've had a golden age for, at least for active fixed income, for the past few years. We did see fixed income flows kind of slow a little bit last month. So some people might anticipate a sleepier year ahead. But I actually think we're going to continue to see an explosion in that active fixed income ETF arena. $400 billion in inflows last year, I think we could easily top that this year for fixed income. Short rates coming down, anchored by expectations of sort of like the easing Fed.

So we're probably going to see investors extend duration, buy some credit. And to your point, money market funds are losing their lustre a little. So if any of that trickles into the credit duration risk spectrum, you're going to see a huge inflow there. And so I think bonds are continuing to be a big story.

**Akins:** Yeah. I think bonds are a huge part of the story.

 
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## Where Will the Money Market Flows Go? 

**Geraci:** Yeah, Dave, I'm glad you put up this chart because I'm calling this the year of fixed income ETFs. And I think when you look at the amount of money that is currently sitting in money market funds, think about why it's there. It's typically because some investors are either very conservative to begin with or they're conservative at the moment, right? And that they're currently taking more of a risk off attitude towards the financial markets.

But as that chart shows, if you look at yields coming down and money market funds paying less than 4%, and then you add in expectations that shorter term interest rates could fall further later this year. We'll see, but I think that's the baseline expectation. I think some investors and advisors are going to try to get out ahead of that and allocate towards higher yielding areas and potentially try to lock in higher yields.

And because of the overall conservative nature of the money that's in money market funds, this money's not going to flow into crypto, in higher beta stocks and those sorts of things. It's gonna find a home in fixed income, in my opinion, and that bodes well for fixed income ETFs. I think for me, fixed income is kind of a boring topic, but I actually think this is a really interesting one because if those shorter term yields continue to come down, I'm fascinated to see if money actually comes out of money market funds and then where it goes. Again, I think it goes into fixed income ETFs, or at least a big chunk.

**Akins:** Yeah. I think I don't disagree with either of your calls, international having a record and fixed income having a record this year. But I think we need to start putting some guardrails around flows and records because every year, every category has a record in ETFs, right? So when you say international or fixed income, I think you have to look at it relative.

And so in perspective, know, bonds over the last 10 years have gotten 34% of flows in the ETFs. 65, 66 % has gone to equities. There's some outliers there for other stuff, but if you just focus on those two categories. So are you saying that we're gonna set a record in terms of that ratio? Or are you saying we're gonna set a record in terms of just overall flows because that's not really too hard to say.

**Nadig:** Because we know that we know the number is going to be big. Yeah, the number is going to be huge. We know that.

**Geraci:** Mike, you're completely taking the punch bowl away from the ETF Zoo party here. We're trying to have a good time, make some prognostications.

**Akins:** Well, I think it does make a difference though, because like right now the entire ETF space, if you just focus on equity and fixed income is 83 % equity, 17 % fixed income. So flows over the last 10 years have actually been outsized to fixed income in that mindset, but obviously equities have vastly outperformed. So it's a lot of it's just that rebalancing effect.

So the question is, to move the needle, whether we're talking international versus U.S. or fixed income versus equities is that ratio. And I think that's kind one of the things that we need to watch in terms of being a buffer for returns.

*Discover the news, data, and voices shaping the ETF community. Follow along* [***here***](https://www.etf.com/sections/podcasts)*.*



 

 

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