Bond ETPs hit by first monthly outflows since December 2010

Fixed-income exchange traded products suffered their first net outflows since the end of 2010 last month after investors fled the asset class on the back of ‘tapering’ fears.

Investors pulled $13.5bn from bond ETPs in June after investors reacted to Ben Bernanke’s suggestion that the US Federal Reserve could slow its quantitative easing programme if growth continues to improve as expected, figures from iShares show.

All maturity categories aside from short maturity ETPs were hit by outflows. Short maturity ETPs witnessed $5.5bn in net inflows last month as investors positioned themselves for rising interest rates.

Overall, ETPs saw net outflows of $8.2bn in June as markets sold off after tapering fears strengthened. Gold funds lost another $4.1bn in their sixth month running of outflows, while emerging market equity ETPs had a fifth month of redemptions and lost $6.6bn.

However, developed market equity ETPs continued to take new money and won $11.8bn in June. This is down from the f $30.3bn captured in May but broadly in line with the flows of $13.2bn seen in April.