American investors pulled US$28.12 billion out of bond funds in the week ending June 26 on fears that the US Federal Reserve could cut its bond-buying later this year, according to data released by Washington-based Investment Company Institute (ICI).
Last week’s withdrawals were the biggest since the ICI started tracking weekly numbers in January 2007.
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The latest outflows from bond funds also marked a big leap from outflows of US$7.97 billion the prior week. Bond funds suffered four consecutive weeks of outflows in June totalling roughly US$60.5 billion in assets.
"For the month of June, we’ve seen an estimated outflow of a little under 2% of total assets in bond mutual funds. This is about what we would have expected with the kind of interest rate increases we have seen during the past two months," said Brian Reid, ICI’s chief economist.
ICI’s data show that taxable bond funds had redemptions of US$20.4 billion and municipal bond funds saw US$7.68 billion pulled in the week ended June 26.
However, funds that hold non-US stocks recorded inflows of US$1.13 billion, down from inflows of US$2.44 the prior week, while funds that hold only US stocks had outflows of US$962 million over the week, double to that of the prior week, when investors pulled US$457 million out of the funds.
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By GlobalDataHybrid funds, which can invest in both stocks and fixed income securities, suffered outflows of US$591 million.
