Investors Pull Record Amount From Bond Funds Last Week

Investors pulled the most ever money from bond funds worldwide, the second straight week of record redemptions, after speculation that the U.S. Federal Reserve may scale back its unprecedented stimulus sent fixed-income markets lower.

Bond funds lost $14.5 billion in the week ended June 12, according to EPFR Global, a Cambridge, Massachusetts-based firm that tracks the flow of money into funds around the world. Institutional and retail investors withdrew $12.5 billion during the prior week, EPFR reported today in an e-mailed statement.

The investor withdrawals last week were from a range of funds, including those that buy emerging-market bonds, U.S. high-yield debt, intermediate-term bonds and municipal debt, according to EPFR.

Investors have been dumping bonds since Fed Chairman Ben S. Bernanke told Congress on May 22 that the central bank’s policy-setting board could start scaling back its bond purchases in its “next few meetings,” if the U.S. employment outlook shows sustained improvement. Global bond markets had their biggest monthly losses in nine years in May.

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