Foreign Investor Flows into U.S. Corporate Bonds Reach Three-Year Highs in January

CountdownToBroke · 2026-02-12T14:05:32+00:00

In January, international investors reached unprecedented levels of investment in U.S. corporate bonds, driven by attractive yields and favorable financial conditions. Despite a recent slowdown, the overall inflow remains robust, indicating strong demand amid concerns about the dollar's weakness.

CountdownToBroke

2026-02-12 14:05:32

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In January, international investors accumulated unprecedented volumes in U.S. corporate bonds, reaching the fastest pace in nearly three years. According to data compiled by JPMorgan Chase and reported through Jin10, this movement reflects a growing appetite for U.S. credit assets amid favorable financial conditions.

Purchase Volumes Break Monthly Records

During January, the average daily net flow of foreign investors into corporate bonds reached $332 million, the highest level recorded since February 2023. Although the last week of the month showed signs of slowdown, with daily inflows averaging $240 million (a 59% decrease compared to the previous week), the total for the month remains the strongest in the past three years.

Attractive Yields and Lower Hedging Costs Drive Demand

JPMorgan analysts Nathaniel Rosenbaum and Silvi Mantri highlighted in their report that foreign investors find U.S. corporate bonds particularly attractive due to a combination of stable returns and reduced hedging costs. This combination has strengthened the positioning of these assets in international portfolios, making them profitable options compared to other market alternatives.

Concerns Over Dollar Weakness: Risk to Foreign Capital?

Wall Street continues to closely monitor the evolution of the U.S. dollar, considering that prolonged weakening could trigger significant withdrawals of foreign capital. However, recent data suggest that investor allocations to corporate bonds remain solid, indicating that so far, currency weakness has not triggered substantial shifts in capital flows. This resilience in international flows suggests that investors value attractive returns more than short-term currency risks.

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