Updated Wednesday, July 30, 2014 as of 3:05 AM ET
Portfolio - Fixed Income
Bond Funds Lose $30.3 Billion in August in ‘Enormous Shift’
by: Lisa Abramowicz and Christopher Condon
Thursday, August 22, 2013
Print
Email
Reprints
Partner Insights

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.”

Get access to this article and thousands more...

All Financial Planning articles are archived after 7 days. REGISTER NOW for unlimited access to all recently archived articles, as well as thousands of searchable stories. Registered Members also gain access to exclusive industry white paper downloads, web seminars, blog discussions, the iPad App, CE Exams, and conference discounts. Qualified members may also choose to receive our free monthly magazine and any of our daily or weekly e-newsletters covering the latest breaking news, opinions from industry leaders, developing trends and growth strategies.

Already Registered?

Lists
2014 Summer Reading List for Advisors

Current Issue

The July Issue is now online!


TWITTER
FACEBOOK
LINKEDIN

Industry Events

August 10, 2014 |

September 9, 2014 |

September 17, 2014 |

September 20, 2014 |

September 28, 2014 |

Already a subscriber? Log in here