💎 Fed’s first rate cut since 2020 set to trigger market. Find undervalued gems with Fair ValueSee Undervalued Stocks

Investors pull $18.5 billion from U.S. bond funds in one week: ICI

Published 11/07/2018, 02:00 PM
Updated 11/07/2018, 02:10 PM
Investors pull $18.5 billion from U.S. bond funds in one week: ICI
US500
-
JPM
-

By Trevor Hunnicutt

NEW YORK (Reuters) - U.S. fund investors fled bonds at the fastest pace since 2013 in the final week of October, worried about rising interest rates and tightening monetary policy, Investment Company Institute (ICI) data showed on Wednesday.

More than $18.5 billion of mutual fund and exchange-traded fund assets flowed out the debt market during the week ended Oct. 31, the most since the "Taper Tantrum" panic of June 2013, when markets worried about the U.S. Federal Reserve planning to stop buying bonds.

Fed policy has again helped drive investors to reconsider their bond holdings after pouring hundreds of billions of dollars into debt products since the 2007-2009 global financial crisis. The latest withdrawals marked a fourth straight week of outflows, according to the trade group.

U.S. Federal Reserve policymakers seem on course to deliver their fourth rate hike of the year in December - the most in any calendar year since 2006 - while letting the Fed's large holdings of bonds accumulated during the financial crisis roll off.

"When rates rise from a very low level, bond yields and stocks can go up at the same time," said David Kelly, chief global strategist at JPMorgan Chase (NYSE:JPM) & Co's funds business.

Investors added the most cash in six weeks - $5.6 billion - to stock funds during the same week as strong quarterly earnings reports rolled in, ICI said. Year-over-year profit growth for the S&P 500 is at 27.7 percent, with most companies beating Wall Street forecasts, according to Refinitiv IBES data.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.