Bloomberg -- U.S.-registered bond mutual and exchange-traded funds lost $30.3 billion to investor redemptions this month, putting them on track for their slowest year since 2004.
The withdrawals for the month through Aug. 19 are already the third-highest on record, following $69.1 billion of withdrawals in June and $42 billion in October 2008, according to a report dated yesterday by TrimTabs Investment Research in Sausalito, California. Bondfunds have suffered $4 billion in redemptions this year, on pace for the biggest withdrawals since investors pulled $7 billion in 2004.
The prospect of losses in the fixed-income market and rising rates have spurred investors to retreat after pouring $1.2 trillion into bondmutual funds and ETFs from 2009 through 2012. Dollar-denominated corporate and government bonds lost 3.4 percent so far this year, according to Bank of America Merrill Lynch index data, the biggest drop for comparable periods since 1981. The investor exodus has hit some of the most prominent bond fund managers including Pacific Investment Management Inc.’s Bill Gross, and DoubleLine Capital LP’s Jeffrey E. Gundlach.
“These outflows mark an enormous shift for the bond world,” TrimTabs said in its report. “A vicious circle of losses and redemptions as the bond binge unwinds could get nasty.”
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