Investors withdrew $1.6 billion from vehicles specializing in European speculative-grade bonds in March. (Bloomberg News)

(Bloomberg) -- Investors are pulling money out of high-yield bond funds at the fastest rate since June as rebounding growth boosts the allure of European equities.

Investors withdrew $1.6 billion from vehicles specializing in European speculative-grade bonds in March, the first net outflow since November, according to data compiled by JPMorgan. That represents the first negative month since November. The picture for global funds is much the same: they lost $10.5 billion in March, the biggest outflow since December 2015, according to consultancy EPFR Global.

As first-round results of the French presidential election tempered investors' sense of political risk in Europe with a strong performance by centrist, pro-business candidate Emmanuel Macron, the region's stocks soared to a two-year high.

Equities typically perform better than bonds when investors expect growth to pick up. Meanwhile, the European Central Bank plans to wind down its asset-purchase program in coming months, removing a pillar of support for bonds and ending the yield distortions that had pushed many investors into the riskier edges of the credit spectrum in the first place.

"We would expect the strong search for yield to reverse as rates investors move out of higher-yielding credit and investors focus on the upside for European equities," JPMorgan strategists led by Saul Doctor wrote in a note to clients Monday. "With French political risk off the table for the moment, we expect credit investors to focus on ECB tapering."

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