Insurers add over $100 billion in corporate bonds, says JP Morgan

Insurers and mutual funds are the fastest growing component of the US corporate bond investor base, according to recent research by JP Morgan. The bank estimates that insurers increased their corporate bond holdings by between $75 billion and $100 billion in 2009, and that mutual funds grew by around $85 billion. In 2010 so far insurance companies bought a further $35 billion and mutual funds added $10 billion. Researcher Eric Beinstein expects that these two types of buyers will remain active throughout 2010, putting a cap on investment grade corporate bond yields.

Banks and foreign investors seem to have been net sellers of US corporate bonds of late, although the data on their holdings is less clear than for insurers and mutual funds, according to the report.