March 26, 2020 / 1:43 PM / 5 days ago

U.S. bond funds post record outflows as coronavirus threatens liquidity

    By David Randall
    NEW YORK, March 26 (Reuters) - Investors pulled $114.4
billion out of mutual funds and exchange-traded funds that hold
U.S.-based debt, the largest retreat on record and more than six
times the previous high, according to data released Wednesday by
the Investment Company Institute. 
    The pullback came amid rising concerns in the bond market
over liquidity and the ability of corporations to repay their
debt due to the economic shock of the coronavirus pandemic. Over
the last three weeks, investors have pulled more than $163
billion out of bond funds, a steep reversal for a category that
had reliably seen inflows for the last three years. The majority
of the outflows came from taxable debt funds, though municipal
bond funds also posted record outflows. 
    At the same time, investors pulled $6.4 billion out of funds
that hold U.S. stocks after moving $17.6 billion into the
category the week before. The benchmark S&P 500 index is now
down more than 24% for the year to date after hitting record
highs as recently as Feb. 19. 
    World stocks funds, meanwhile, lost $5.2 billion in assets,
extending a losing streak that has now stretched over the last 4
weeks. 
   
    The following is a broad breakdown of the flows for the
week, including mutual funds and exchange-traded funds in
millions of dollars:
    
             3/18/20  3/11/20  3/4/202  2/26/20  2/19/20
                  20       20        0       20       20
 Equity      -11,611   16,012  -20,214  -13,916      276
    Domesti   -6,407   17,616  -17,254  -13,536   -3,256
    c                                            
    World     -5,205   -1,604   -2,960     -380    3,532
 Hybrid      -25,617   -5,777   -6,464   -1,421      201
 Bond        -114,40  -32,300  -17,762    3,198   14,888
                   1                             
    Taxable  -94,046  -29,228  -17,244      204   12,245
    Municip  -20,355   -3,072     -518    2,993    2,643
    al                                           
 Commodity    -1,483    2,344      318      229      841
 Total       -153,11  -19,721  -44,122  -11,912   16,207
                   2                             
 
 (Reporting by David Randall; Editing by David Gregorio)
  
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