In the week ended June 5, Treasury bond funds saw their biggest outflows ever ($2.6 billion, or 0.9% of assets under management).
So did high yield bond funds, which lost $6.6 billion (1.7% of AUM). And so did mortgage-backed securities funds, which shrank by $0.8 billion (0.9% of AUM).
Combining these asset classes, bond funds as a whole saw a staggering $12.5 billion of redemptions – the second biggest weekly outflow ever, behind only October 2008 when global financial markets descended into crisis.
Below is a complete breakdown of this week's fund flows, via BofA Merrill Lynch Chief Investment Strategist Michael Hartnett:
Flows by Asset Class
Bonds: massive $12.5bn redemptions (second largest weekly outflows on record; record was back in Oct'08)
Equities: $6.2bn outflows (largest in 2013)
Precious metals: $1.6bn outflows (17 straight weeks = longest on record)
MMF: $3.9bn inflows (3rd straight week)
Flows by Fixed Income Sector
Record $6.6bn outflows from HY bond funds
Record $2.6bn outflows from govt/tsy funds
Record $0.8bn outflows from MBS funds
$1.0bn outflows from TIPS (2nd largest on record)
$1.5bn outflows from EM debt (6th largest on record)
$1.2bn outflows from munis (largest since Dec'12)
Floating-rate debt bucks trend with 50th straight week of inflows ($1.1bn)
Tiny outflows from IG bond funds (first since Feb'13)
Flows by Equity Region
$5.5bn outflows from EM equity funds = largest weekly outflows since Aug'11
Note that lion's share of outflows via GEM ETF's (EEM, VWO)
Another $12-15bn outflows over next 2 weeks will trigger contrarian “buy” signal from our EM Flow Trading Rule
Modest outflows from US ($0.5bn) and Europe ($0.3bn) (outflows in 13 out of past 14 weeks)
Japan eke out small inflows ($0.4bn) despite rout in markets
First outflows from real estate funds ($0.6bn) in 16 weeks; first outflows from financials ($0.3bn) in 6 weeks
Earlier this week, Morningstar estimated that PIMCO's flagship Total Return Fund saw $1.32 billion of redemptions in May, the first outflow since 2011.
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