$25 billion evaporated: Global bond funds in trouble

Global bond funds recorded their largest outflows since 2020 in the week ending April 9, amid investor concerns about the outlook for global economic growth and volatility in international trade markets.

Investors have withdrawn a net total of $25.71 billion from global bond funds, according to data from LSEG Lipper. Illustration photo

Investors withdrew a net $25.71 billion from global bond funds during the week, the highest in more than five years, according to data from LSEG Lipper, since the week ended April 1, 2020.

During the week, US government bonds were under strong selling pressure, causing the yield on 10-year bonds to increase by about 45.5 basis points to 4.45% - the largest weekly increase since November 2001.

This development reflects investors' cautious sentiment in the face of geopolitical and macroeconomic factors that could affect inflation and monetary policy in the coming time. Some experts believe that the sharp increase in yields is a sign that the market is re-evaluating the role of US government bonds as an absolutely safe investment channel in the context of many changes in the world.

By region, European funds also saw outflows of $12.72 billion. In contrast, funds in Asia recorded light inflows of about $289 million.

High-yield bond funds and loan participation funds recorded significant outflows of $15.92 billion and $6.69 billion, respectively, indicating that investors are reducing their risk tolerance.

Money market funds – often seen as a safe haven during times of volatility – continued to absorb a net $25.8 billion in the week, marking the second consecutive weekly increase.

Thanh Thanh

Reuters

Source: https://congthuong.vn/25-ty-usd-boc-hoi-quy-trai-phieu-toan-cau-lao-dao-382773.html