Survey flags big increase in AUM of Euro flexible bond funds

"Money has flowed rapidly into flexible and uncontrolled bond funds as investors seek to improve on the meager returns offered in the wider bond market, and gear up from interest rate hikes," the report states. "But heavy outflows at PIMCO and high cash holdings in other funds suggest the best opportunities may have passed.

"A 30-year bond bubble means fixed-income investors need to look beyond the safer havens for meaningful returns," the report adds. "'Go anywhere' bond funds offer opportunities, although in some cases this means buying junk bonds."

Among those potentially exploring European bond funds are high net worth investors seeking alternative vehicles that might offer superior returns.

High net worth investors have, on average, 22 percent of their portfolios invested in alternatives, according to a study on trends in nontraditional investing published by MainStay Investors. The study, "Investing Outside the Box," observes that one quarter of investors (26 percent) see their exposure to alternatives increasing over the next five years by an average of 2.9 percentage points.