Investor Jitters: Massive Sell-Off Hits U.S. Bond Funds

U.S. bond funds experienced substantial outflows as investors reacted to fears of inflation spurred by President Trump's tariff measures. During the week ending April 16, bond fund withdrawals totaled $10.07 billion. Simultaneously, short-to-intermediate investment-grade funds saw a net $6.3 billion sell-off, while government and treasury funds attracted $6.82 billion.

In a significant market movement, U.S. bond funds witnessed heavy selling as investors rushed to shed holdings amid growing fears of inflation and a potential economic recession. The sell-off, linked to President Donald Trump's tariff policies, saw net outflows reach $10.07 billion for the week ending April 16, according to data from LSEG Lipper.

Breaking down the numbers, U.S. short-to-intermediate investment-grade funds experienced disposals totaling $6.3 billion, following a similar trend from the previous week. Contrary to this, investors poured $6.82 billion into short-to-intermediate government and treasury funds, indicating a flight to perceived safety.

Equity funds also took a hit, with net sales amounting to $10.62 billion. Sectors such as technology, healthcare, and consumer staples were not spared, registering sales of $819 million, $514 million, and $348 million respectively. Additionally, money market funds saw outflows of $131.74 billion, marking a continued trend of investor caution.

(With inputs from agencies.)