Since the start of 2013, a net of $70.7 billion have been withdrawn from bond mutual funds. Are retail investors right?
Retail investors are running away from bonds.
Data released by TrimTabs Investment Research shows more outflows from bond mutual funds than ever seen before.
Since the start of 2013, a net of $70.7 billion have been withdrawn from bond mutual funds. That beats the record of $62.5 billion for all of1994. The outflows have now been going on for seven consecutive months. Prior to that, bond funds saw net inflows every month for 21 months.
What changed in May? That was when Federal Reserve Bank Chairman Ben Bernanke hinted that the Fed’s $85 billion monthly bond-buying stimulus program may be tapered should the economy improve. Though the taper has yet to happen, it’s been enough to scare bond investors into selling their fixed income holdings. Along with it, yields on the benchmark US Treasury 10-year bond went from a low of 1.61% in May to 2.98% in September. TradingRead More »from Retail is running from bonds, but are they making a mistake?