Investors are fleeing bond funds as major players within the space continue to report declines, the Wall Street Journal reports
In fact, investors pulled $5 billion out of bond funds during the week ended Dec. 15, contributing to the five-week total outflow of a record $7.6 billion, according to EPFR Global, a Boston fund-flow tracker.
WSJ notes that the five biggest bond funds have fared poorly lately, though they are still up for the year. From November 4 to December 17, the
$250 billion Pimco Total Return Fund [see profile]
lost 3.42 percent, compared to a 2.51 percent loss in the BarCap U.S. Aggregate Bond Index, according to Morningstar. The second largest bond fund, the
$89 billion Vanguard Total Bond Market Index Fund [see profile]
lost 2.64 percent and the fourth largest bond fund, the $38.4 billion American Funds Bond Fund of America Fund [see profile]
lost 2.79 percent.
The third largest bond fund, the $43.7 billion Templeton Global Bond Fund, lost 1.29 percent. For its part, the $38.3 billion Vanguard Short-Term Investment Grade Fund, which lost 0.91 percent.
Templeton Global Bond Fund's portfolio manager Michael Hasenstab
told the pub that the fund doesn't hold any Treasurys and continues to hold a negative view of them and Kenneth Volpert
, head of Vanguard's taxable-bond group, said the losses in Vanguard's bond funds were due to a rising-rate environment.
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