Record Bond Fund Redemptions Echo Capitulation Lows In 2008

Bond Funds saw a a massive $23bn of redepmtions in the latest week - a record in absolute terms. The outflows were across every segment of the fixed income market and are second only (in %of AUM) to the capitulative collapse that occurred after the October 2008 plunges (after which Treasuries rallied 5% in 6 weeks). The past 4 weeks have seen an unprecedented $58bn of outflows. All of this is providiung fodder for the mainstream media (and several hopeful strategists) that the great rotation 'must' have started. However, as BofAML notes, there were $13.1 billion of outflows from equity funds (including $6.7 billion from pure long-only funds) - the most since late April. It appears the money that has been 'rotated' into stocks from money-market funds has merely reverted back into these safe-havens - another reason why the powers that be would like to drastically reduce the access to these liquidity-sapping investment vehicles to keep the sheep in risk assets.

Bond Redemption hit a record hit (in absolute terms) and 2nd largest ever in AUM terms...


This was also a record week for Global HY outflows helped by the -$3.7bn outflows from non-US domiciled funds, their highest so far. US IG funds posted their highest dollar outflow on record (highest percentage outflow since 2009), coming in at -$5bn, which eroded 0.7% from their AUM.

Loans and Money Market funds were the only two asset classes reporting inflows, coming in at +$1bn and +$5.5bn respectively.


Charts: BofAML