Bond funds lose $30.3B in August

|By:, SA News Editor

"These outflows mark an enormous shift for the bond world," says TrimTabs, which gathered the data. "A vicious circle of losses and redemptions as the bond binge unwinds could get nasty ... Lulled into complacency by a 30-year bull market, many investors probably did not understand the risks ... Now they seem to be reacting very quickly to losses."

The withdrawals this month are the 3rd highest on record - June 2013 and October 2008 are #1 and #2 - and the month isn't even over yet. Bond funds YTD have seen $4B in redemptions, putting them on pace for their worst year since 2004's $7B loss. This comes against $1.2T of inflows from 2009-2012.

It's estimated Pimco saw $7.4B in redemptions in August as Bill Gross' giant Total Return Fund (ETF version: BOND) has lost 3.6% YTD. Some Pimco closed-end funds having a rough run (with a couple now trading at rare discounts to NAV): PHK, PTY, PDI.

DoubleLine is estimated to have lost $631M, but Jeff Gundlach's Total Return Fund has fallen just 1.1% YTD - better than 86% of its rivals. The DBL now trades at a discount to NAV.

Broad bond ETFs: AGG, BND, LAG, SCHZ, BOND, SAGG, MINC.