“For a lot of clients, they feel like they’ve just been bouncing up and down, and stocks are not going much of anywhere,” said Michael Ball, president of Weatherstone Capital Management, an asset manager based in Denver. “That gets people on edge.”

For investors weary of such volatility, bonds have become a go-to alternative.



Bond prices do not fluctuate as much as stocks, and the returns they offer are typically more certain than those of many other investments. On top of the interest payments companies are obligated to make, the price of the bond itself can rise — as they have this year — generating an investment gain for bondholders.

So, as investors sold almost $70 billion of stock investments like mutual funds and exchange-traded funds in the year through July, according to data from EPFR , nearly $260 billion of cash flooded into vehicles that invest in the American bond market. Interest rates in places like Europe and Japan are even lower than they are in the United States, making bonds in the United States appealing to global investors as well.

One of the broadest gauges of the American bond market, the Bloomberg Barclays Aggregate index — the S&P 500 of the American bond market — is sitting on gains of more than 9 percent, including both interest payments and price appreciation. If it were to finish the year at that level, it would be the index’s biggest increase since 2002.