Worst week ever for US Treasuries

US Treasuries had their worst week ever on Wednesday as investors pulled out a record $4bn from bond funds, equivalent to 1.3 per cent of assets under management (AUM).

Bank of America Merrill Lynch chief investment strategist Michael Hartnett called it the “Great Rotation”, referring to the expectation that record-low bond yields will push investors into equities for better returns, particularly as confidence improves.

There were also significant outflows from BRICs equity funds – Brazil funds lost 1.8 per cent of (AUM), Russia 0.8 per cent, India 0.4 per cent and China 0.1 per cent.