June 7 Investors pulled a record $12.53 billion from bond funds tracked by EPFR Global in the week ended Wednesday as concerns lingered that the Federal Reserve will reduce its bond-buying program in coming months.
Outflows from U.S. bond funds accounted for $8.77 billion of total outflows for the week ended June 5, the largest U.S. funds outflow since EPFR started tracking this data in August 2001. High-yield bond funds also showed a record $6.6 billion in redemptions, and emerging market bond funds had outflows of $1.52 billion.
U.S. bond prices have fallen, boosting yields, as investors worried the Federal Reserve will reduce quantitative easing, in which the U.S. central bank has been purchasing $85 billion in Treasuries and agency mortgage securities each month.
Fed officials, who enacted the program to decrease long-term borrowing costs and boost hiring, have discussed the possibility of cutting monthly purchases later in the year.
EPFR said investors also withdrew money from stocks funds focused on China in the latest week, while putting less money into Japan equity funds. The $834 million pulled from China equity funds was the most since January 2008.
Inflows to Japan equity funds hit an 18-week low as the Nikkei 225 average fell and investors worried about the effectiveness of the Japanese government's stimulus policies. Japan's central bank said on April 4 that it would fight deflation by injecting $1.4 trillion into the country's economy in less than two years.
Money market funds closed a volatile week with inflows of $3.87 billion. Floating-rate funds, meanwhile, were the only major bond fund group to see inflows, taking in $1.06 billion to bring their inflow streak to 50 straight weeks.
EPFR Global Research Director Cameron Brandt said the data was consistent with expectations that the Fed's stimulus will begin to wind down in the second half of the year.
Thomson Reuters' Lipper service released data Thursday that showed investors in funds based in the United States pulled a record $4.63 billion from high-yield bonds in the week ended June 5.
EPFR Global tracks 49,000 mutual funds worldwide that include ETFs and alternative funds and make up $20.5 trillion in assets under management. Lipper tracks 261,000 funds around the world with $52 trillion in total assets.