Monday, March 24, 2014

Where Did It Go?

Bond Funds Bleed $61.7 Billion

Battered by rising interest rates and falling prices, investors have yanked out a record $61.7 billion from bond funds in June, according to

But the second half of the Great Rotation-the move from bond funds into stock funds-hasn't started yet, according to the most recent statistics. The bond fund outflows shatter the previous record of $41.8 billion in October 2008. Through June 24, investors have pulled the net $52.8 billion from traditional bond funds and another $8.9 billion from exchange traded bond funds.

Bond prices fall when interest rates rise, and rates have been rising since May 2, when the yield on the benchmark 10-year Treasury note hit 1.63%. It closed at 2.54% Wednesday.

The rate rise was enough to shock bond investors, who have enjoyed rising prices and falling yields for decades. A record $1.21 trillion poured into bond funds in the four years from 2009 two 2012 according to

The question is where did all the money go? Given recent stock market performance, we dont expect there will be big flows to equities anytime soon, says David Santaschi CEO of TrimTabs.

Clearly investors are taking their money and running. Does this mean theres an opportunity for
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