Investors Drop Biggest Bond ETF Like a Hot Potato

The biggest bond-related ETF experienced a record one-day withdrawal after the global fixed-income market witnessed a swift plunge in response to the Treasury bond retreat.

The iShares Core US Aggregate Bond ETF (NYSEArca: AGG), which tracks the investment results found in the Bloomberg Barclays U.S. Aggregate Bond Index, recorded a record daily outflow of almost $2 billion on Tuesday, its largest one-day redemption since the ETF began trading in 2003, the Financial Times reports.

The single day withdrawal may be associated with one large player calling it quits as outflows from other big bond ETFs have moderated this week. EPFR Global data revealed that more than $8.1 billion was yanked out of bond mutual funds and ETFs in the 14 days ended October 3.

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