Outflows from bond funds increase to $30.3 bln in August -TrimTabs
NEW YORK Aug 21 (Reuters) - Investors have withdrawn $30.3 billion from bond funds so far in August as interest rates continue to rise on fears the U.S. Federal Reserve will slow its bond-buying program, data from research provider TrimTabs showed on Wednesday.
Investors pulled roughly $10.6 billion from bond mutual funds and exchange-traded funds during Aug. 16-19 alone, ramping up the latest outflow figure, which spanned Aug. 1-19, TrimTabs chief executive David Santschi said in an interview.
"People think that these funds are safe. As soon as funds that they think are safe are posting losses, they want out fast," Santschi said on the outflows from bond funds.
The outflows so far in August already amount to the third-highest monthly outflow since TrimTabs began tracking the funds in 1993, and have already doubled outflows of $14.8 billion in July, the research provider said.
Stronger U.S. economic data has led investors to believe that the Fed will cut back on its $85 billion in monthly purchases of Treasuries and agency mortgages soon.
The U.S. Labor Department released data on Aug. 15 showing that the total number of Americans filing for unemployment benefits fell to a near six-year low over the previous week .
The anticipation of a pullback in stimulus has spurred investors to sell bonds. The yield on the 30-year Treasury bond jumped to 3.91 percent in intraday trading on Monday, the highest since August 2011.
The yield on benchmark 10-year Treasury notes rose as high as 2.90 percent in intraday trading on Monday, or 128 basis points higher than the yield of 1.62 percent on May 2. As yields rise, prices fall.
Investors are turning their focus to the minutes from the Fed's July meeting set for release at 2 p.m. EDT (1800 GMT) Wednesday, which will be evaluated for any hints on the U.S. central bank's timing for reducing the stimulus.
Bonds are not the only asset class suffering from investor angst.
Investors have withdrawn $11.3 billion from U.S. stock mutual funds and ETFs so far in August, TrimTabs said. The S&P 500, which has risen more than 15 percent this year, has fallen more than 2 percent so far this month.
Funds that hold stocks of companies outside the United States have been popular and attracted $13.2 billion so far in August, TrimTabs said. Those inflows have come even as the MSCI world-equity index declined 1.24 percent.
A substantial portion of those inflows have gone into European stock funds, Santschi said. Investors have poured $4.6 billion into European stock ETFs alone so far in August.
"Everyone seems to believe that Europe's debt problems are fixed," Santschi added.
Data on Aug. 14 showed that the economies of Germany and France grew more quickly than expected in the second quarter, pulling the euro zone out of a 1-1/2-year recession.