U.S.-based taxable bond funds bleed $36.2 billion in third-quarter: Lipper

NEW YORK (Reuters) - Investors in U.S.-based funds pulled $36.2 billion out of taxable bond funds in the third quarter, marking the biggest outflows from the funds since the fourth quarter of 2008, preliminary Lipper data showed on Thursday.

Funds that hold investment-grade corporate bonds posted $30.6 billion in outflows over the quarter to mark their biggest quarterly outflows since Lipper records began in 1992, the preliminary data showed.

"It points to concerns about higher interest rates ahead," said Jeff Tjornehoj, head of Americas research at Lipper. The outflows came even as the benchmark Barclays U.S. Aggregate Bond Index rose 1.2 percent over the quarter.

Investors are closely eyeing the Federal Reserve for signals on when the central bank will hike interest rates for the first time since 2006.

Taxable bond funds started the fourth quarter on a brighter note with investors committing $2.3 billion to the funds in the week ended Oct. 7, according to Lipper's final weekly data. Funds that specialize in U.S. Treasuries attracted $1.9 billion, marking their biggest inflows in four weeks.

Taxable bond exchange-traded funds attracted all of the inflows, at $4.6 billion, while taxable bond mutual funds posted $2.3 billion in outflows to mark their 11th straight week of withdrawals.

Investors committed $735 million to riskier high-yield bond funds after pulling $2.2 billion from the funds the prior week, which were the biggest outflows in 13 weeks.

Investors pulled $8 billion out of stock funds over the weekly period, marking the biggest withdrawals from the funds in four weeks. All of the outflows, at $8.1 billion, were from funds that hold U.S. shares, while funds that specialize in foreign shares attracted a meager $58 million in inflows.

Tjornehoj attributed the outflows from stock funds to uncertainty over the timing of the Fed's first rate hike and worries over global growth. He noted concerns over China, the world's second-biggest economy.

"Until we get better economic news out of China, I think the negative sentiment will weigh on investor behavior," he said.

For the quarter, stock funds posted $10.8 billion in outflows to mark their first quarterly withdrawals since the fourth quarter of 2012, the preliminary Lipper data showed.

The weekly Lipper fund flow data is compiled from reports issued by U.S.-domiciled mutual funds and exchange-traded funds.

(Reporting by Sam Forgione; Editing by Bernard Orr and Diane Craft)