Taxable Bond Funds Experience Big Outflow

Investors withdrew $3.6 billion more from taxable bond funds than they put in during the week ended Wednesday, the biggest outflow in more than nine years, according to an estimate by AMG Data Services.

The outflows included a record $2.6-billion withdrawal from high-yield corporate bond funds, AMG reported Friday. Investors also withdrew $862 million in tax-exempt municipal bond funds, the most since October 2002, according to AMG, an Arcata, Calif.-based firm that tracks fund flows.

The U.S. Treasury market in July turned in its worst performance since 1980, according to Lehman Bros. Holdings Inc. Nine of the 10 bestselling bond funds chalked up negative total returns during the month, according to Bloomberg data.

Investors added $359 million to U.S. stock mutual funds for the week, AMG said. Funds that invest in U.S. companies received the most.