Investors have pulled a record US$12.53 billion out of global bond funds in the week ended 5 June 2013 on the back of fears of a tighter US monetary policy, according to data released by research firm EPFR Global.
The research firm said that the selling wave swept across all major classes of bond fund, including US$6 billion of outflows from junk bonds funds and US$1 billion from emerging markets funds.
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Outflows from US bond funds accounted for US$8.77 billion of total outflows, the largest US funds outflow since EPFR started tracking this data in August 2001.
High-yield bond funds also showed a record US$6.6 billion in redemptions, and emerging market bond funds had outflows of US$1.52 billion. Equity funds reported net outflows of US$5.5 billion; the worst week since February 2011.
Meanwhile, EM bond funds shed US$1.5 billion, after a fall of US$240 million the previous week, the worst week since October 2011. Local currency debt funds reported their first net outflow since July 2012, down US$343 million, while hard currency bond funds lost US$984 million.
EPFR said investors also withdrew money from stocks funds focused on China in the latest week, while putting less money into Japan equity funds. The US$834 million pulled from China equity funds was the most since January 2008.
Inflows to Japan equity funds hit an 18-week low as the Nikkei 225 average fell and investors worried about the effectiveness of the Japanese government’s stimulus policies.
EPFR Global research director, Cameron Brandt, said the data was consistent with expectations that the Fed’s stimulus will begin to wind down in the second half of the year.
