Your third-quarter statement is in the mail, and William Power's Quarterly Monitor in Monday's Journal Report tells you what's inside before you open it. The average U.S.-stock fund lost 2.4% in the quarter, trimming its 2026 gain to 10.3%, per LSEG; S&P 500 index funds managed +2.2%. International-stock funds slipped 0.4% and are up 10.1% for the year. Bond funds, Power writes, were “hammered”: the investment-grade funds most people own lost 3.7% as Treasury yields ran to multiyear highs. Then comes the line that should stop you. Investors put a net $175 billion into bond funds in the quarter — against $4.3 billion into U.S.-stock funds.
Read that twice. The asset class that just lost money took in roughly 40 times the new money of the one that's up double digits for the year. Some of it is sensible: yields are higher than they've been in years, and a Treasury paying north of 5% is real competition for stocks — Nuveen's Saira Malik warns that AI highfliers “may be vulnerable to a selloff” if investors decide they'd rather take the risk-free rate. Some of it is the oldest reflex in the book, buying the thing that's been going down because it looks cheaper. The point isn't that bonds are wrong. It's that a flow this lopsided after a loss this sharp is a sentiment reading as much as an allocation.
Which bonds got hammered
The Mutual-Fund Yardsticks table on R6 shows the loss wasn't evenly spread, and that's the useful part. Short-term taxable bond funds lost 0.4% in the quarter. Intermediate bond funds lost 3.7%. Long-term U.S. government funds lost 4.9%. Same quarter, same rate shock, very different bills — the difference is duration, the measure of how far a fund's price moves when yields move. Wednesday's ETF table makes it current: the long-Treasury ETF TLT is down 11.3% in price for the year, while the 0–3 month bill fund SGOV's price is up 0.1% — flat, as it's meant to be, with the return paid out as yield. If your statement shows a bond fund down 4% and you thought bonds were the safe part, you owned more duration than you knew.
BMO's Carol Schleif supplies the other half of the picture in the column's pull quote: for all the fretting over inflation, yields and geopolitics, stocks keep climbing the wall of worry, with double-digit gains this year. Both things are true at once — a sour quarter inside a good year — which is why the statement feels worse than the year-to-date line says it should.
Our read
This is Fixed Income (IN02) with a Behavioral chaser. The desk's safe money sits in bills and floating paper — SGOV (49 books) and USFR (14) — because the job of that money is to be there, not to make a rate call; long Treasurys (TLT) are avoided here, and this quarter is the reason in one line. The $175 billion isn't a verdict on bonds. It's a reminder that when a crowd rushes into an asset after it's fallen, you'd better know which part of that asset you're buying. For most retirees the answer is the short part for the next few years of spending, and the long part only if you can hold it to maturity and mean it.
The Q3 statement exercise: find each bond fund, look up its duration (it's on the fact sheet), and multiply by the yield move you fear. That number is your bill for the next shock. Then check whether the stock side drifted off target in a quarter where the S&P funds made money and nearly everything else lost it. Twenty minutes, once a quarter, before the mail becomes a surprise — that's the whole umbrella.