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U.S. retail investors still smarting from bond fund losses

Published Nov 28, 2018 03:48PM ET
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© Reuters. U.S. retail investors still smarting from bond fund losses

By Trevor Hunnicutt

NEW YORK (Reuters) - U.S. fund investors pulled the most cash out of bonds in three weeks during the latest seven-day period, according to Investment Company Institute (ICI) data on Wednesday that revealed increased concern by retail investors.

Mutual funds, heavily used by retail investors, reported a 22nd straight week of withdrawals as $17 billion flowed out in the seven days through Nov. 20.

Exchange-traded funds (ETFs), whose sales are traditionally driven more by institutional investors, attracted $10 billion, the trade group said.

Including both mutual funds and ETFs, U.S.-based bond funds posted $3.8 billion withdrawals while $354 million fled stock funds, according to the ICI.

Investors who use bonds as a stable source of income have been reviewing statements showing negative returns this year. The average U.S.-based bond fund is down 1.35 percent for the year, according to Lipper data earlier this month.

The U.S. Federal Reserve has pushed rates higher in an effort to stanch inflation but the higher yields this year have also eaten away at bond prices.

In more recent weeks fears that corporate credit could deteriorate - as the U.S. economy slows from strong growth rates - has also walloped debt markets.

U.S. retail investors still smarting from bond fund losses
 

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