Bond Funds Suffer Huge Outflow—-Setting The Stage For Another Meltdown

And yet, despite surging prices, investors couldn’t wait to get the hell out of credit amid the sudden repricing of inflation expectations which are certain to send yields higher (unless, of course, another wave of deflation emerges). In fact, BofA finds that last week saw the first simultaneous outflows from IG, HY and EM bond funds since the U.S. election.

According to BofA, which cited EPFR data, a whopping $14.1 billion was pulled from debt funds, with $10.9 billion taken from high-yield bonds alone, the second highest outflow on record.