Investors Withdraw $3.7B from ETFs, Bond Funds See Net Redemptions
LQD•Investors redeemed $3.7B from U.S. ETFs in the week ended July 3, marking the first weekly net outflow since June 12. Corporate bond ETFs, including iShares iBoxx $ Investment Grade Corporate Bond ETF, recorded net redemptions as benchmark yields ticked higher.
1. ETF Outflows Reverse Inflows
In the week ended July 3, U.S. ETFs experienced a rare net outflow of $3.7 billion, snapping a three-week streak of investor inflows and signaling a shift in sentiment toward broad market funds.
2. Fixed-Income ETFs Under Pressure
Rising benchmark yields prompted investors to pull capital from fixed-income ETFs, with aggregate redemptions concentrated in corporate and government bond funds as yield curves steepened.
3. LQD Faces Net Redemptions
iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) recorded net outflows during the period, potentially widening its bid-ask spread and exerting pressure on its secondary-market liquidity.
