Bonds outflows fastest since taper tantrum

Outflows from bonds funds have continued at a remarkable pace with high-grade funds suffering outflows of $3.01bn over the past week, the largest since the ‘taper tantrum’.

Bonds outflows fastest since taper tantrum

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According to Bank of America Merrill Lynch, even short-term funds suffered their first outflows since March with $892m being pulled.

Market fretting over Greece and interest rate rises were the main drivers.

High-yield fund outflows for the third week in a row while government bonds funds outflows were reigned in a little but still remained well above $1bn. 

Money-market funds saw outflows of $10bn, the largest in eight weeks, while emerging market debt funds posted their fifth weekly outflows in row. 

Fixed income funds collectively have lost more than $17bn over the last eight weeks.

All that money has to go somewhere and equity funds saw weekly inflows rising to $3.4bn BAML said, an 11 week high.

BAML noted that credit ETFs have ‘held up better through the storm’ than conventional funds, recording more moderate outflows.

The same overall trend was still present in ETF’s however, with equity ETFs seeing $5bn of inflows, and credit ETFs recording $1bn of outflows over the past three weeks.