U.S. bond funds post record outflows as coronavirus threatens liquidity

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 By David Randall NEW YORK, March 26 (Reuters) - Investors pulled $114.4
billion out of mutual funds and exchange-traded funds that hold
U.S.-based debt, the largest retreat on record and more than six
times the previous high, according to data released Wednesday by
the Investment Company Institute. The pullback came amid rising concerns in the bond market
over liquidity and the ability of corporations to repay their
debt due to the economic shock of the coronavirus pandemic. Over
the last three weeks, investors have pulled more than $163
billion out of bond funds, a steep reversal for a category that
had reliably seen inflows for the last three years. The majority
of the outflows came from taxable debt funds, though municipal
bond funds also posted record outflows. At the same time, investors pulled $6.4 billion out of funds
that hold U.S. stocks after moving $17.6 billion into the
category the week before. The benchmark S&P 500 index is now
down more than 24% for the year to date after hitting record
highs as recently as Feb. 19. World stocks funds, meanwhile, lost $5.2 billion in assets,
extending a losing streak that has now stretched over the last 4
weeks. The following is a broad breakdown of the flows for the
week, including mutual funds and exchange-traded funds in
millions of dollars: 3/18/20 3/11/20 3/4/202 2/26/20 2/19/20 20 20 0 20 20 Equity -11,611 16,012 -20,214 -13,916 276 Domesti -6,407 17,616 -17,254 -13,536 -3,256 c World -5,205 -1,604 -2,960 -380 3,532 Hybrid -25,617 -5,777 -6,464 -1,421 201 Bond -114,40 -32,300 -17,762 3,198 14,888 1 Taxable -94,046 -29,228 -17,244 204 12,245 Municip -20,355 -3,072 -518 2,993 2,643 al Commodity -1,483 2,344 318 229 841 Total -153,11 -19,721 -44,122 -11,912 16,207 2 (Reporting by David Randall; Editing by David Gregorio) 

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