Sunday, 11 August 2013

Bond funds have lost $6.2 bln so far this month - TrimTabs

Aug 11 (Reuters) - Bond mutual funds and bond exchange-traded funds have lost $6.2 billion so far in August, continuing a trend this summer where investors favor stocks over bonds, research provider TrimTabs Investment Research said on Sunday. While bond funds redeemed $84.3 billion in June and July, they have lost $6.2 billion through Aug. 6, TrimTabs said.On the equity side, investors have begun favoring offshore stocks, it said, and equity mutual funds and exchange-traded funds have gained $9.9 billion through Aug. 6.The moves came as the U.S. Federal Reserve is buying $85 billion per month in mortgage-backed and Treasury securities in an effort to keep long-term rates down and bolster the economic recovery."Soothing words from Federal Reserve officials that the Fed will not take away the punch bowl anytime soon were apparently all investors needed to resume reaching for yield," TrimTabs CEO David Santschi said in a report to clients.Fed Chairman Ben Bernanke said in June the U.S. central bank could start scaling back that program later this year, with an eye toward ending them altogether by mid-2014, when the U.S. unemployment rate is expected to be around 7 percent.

This article is taken from Reuters.com

No comments:

Post a Comment