Treasury Bond Funds Just Had Their Worst Week Ever

So did high yield bond funds, which lost $6.6 billion (1.7% of AUM). And so did mortgage-backed securities funds, which shrank by $0.8 billion (0.9% of AUM).

Combining these asset classes, bond funds as a whole saw a staggering $12.5 billion of redemptions – the second biggest weekly outflow ever, behind only October 2008 when global financial markets descended into crisis.

Below is a complete breakdown of this week's fund flows, via BofA Merrill Lynch Chief Investment Strategist Michael Hartnett:

Flows by Asset Class

Bonds: massive $12.5bn redemptions (second largest weekly outflows on record; record was back in Oct'08)

Equities: $6.2bn outflows (largest in 2013)

Precious metals: $1.6bn outflows (17 straight weeks = longest on record)

MMF: $3.9bn inflows (3rd straight week)

Flows by Fixed Income Sector

Record $6.6bn outflows from HY bond funds

Record $2.6bn outflows from govt/tsy funds

Record $0.8bn outflows from MBS funds

$1.0bn outflows from TIPS (2nd largest on record)

$1.5bn outflows from EM debt (6th largest on record)

$1.2bn outflows from munis (largest since Dec'12)

Floating-rate debt bucks trend with 50th straight week of inflows ($1.1bn)

Tiny outflows from IG bond funds (first since Feb'13)

Flows by Equity Region

$5.5bn outflows from EM equity funds = largest weekly outflows since Aug'11

Note that lion's share of outflows via GEM ETF's (EEM, VWO)

Another $12-15bn outflows over next 2 weeks will trigger contrarian “buy” signal from our EM Flow Trading Rule

Modest outflows from US ($0.5bn) and Europe ($0.3bn) (outflows in 13 out of past 14 weeks)

Japan eke out small inflows ($0.4bn) despite rout in markets

First outflows from real estate funds ($0.6bn) in 16 weeks; first outflows from financials ($0.3bn) in 6 weeks

Earlier this week, Morningstar estimated that PIMCO's flagship Total Return Fund saw $1.32 billion of redemptions in May, the first outflow since 2011.

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