Bond Investors Beware: Mutual Fund Outflows Accelerating as Inter
We all are quite aware that the economic recovery has been less than stellar. One area of serious concern—which I alerted my readers of months ago—is the upcoming rise in interest rates.
This is not a new topic for my long-time readers; I began warning readers to get out of long-term bonds when I issued my forecast months ago that interest rates were set to rise, even if the Federal Reserve didn’t start hiking them up immediately.
This is now starting to hit home, as outflows from U.S. mutual funds that specialize in bonds and exchange-traded funds (ETFs) that invest in securities tied to interest rates are increasing. According to TrimTabs, so far for the month of August, $19.7 billion has been pulled out of U.S. bond mutual funds and ETFs. That is already greater than the total for July, when $14.8 billion was pulled out of these investments. (Source: TrimTabs web site, August 19, 2013.)
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