NEW YORK ( TheStreet) -- Worried about budget uncertainties in Washington and debt problems in Europe, investors have been seeking safety in bond funds. During the first six months of this year, inflows into taxable bond funds totaled $92 billion, according to Morningstar. Should you join the crowd that is rushing into bonds? Probably not. Chances are that bond funds will deliver puny returns in coming years.To size up the outlook for bonds, consider a forecasting method long promoted by John Bogle, founder of Vanguard Group. According to Bogle, total returns in the coming decade should about equal the current bond yield. He says that the system works because most of bond returns come from the yield. If Bogle is right, the annual return of bonds will be about 2.9%, which is the current yield on 10-year Treasuries.
Bond Funds May See Meager Results
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