A total market value of US$317 billion was erased after the steepest two month loss for securities. The biggest investors in Asia and Europe, Mizuho and HSBC, kept their money in Treasuries.
In the past month, Mizuho Asset Management Co added Treasuries to its holdings that were due in 10 years or longer. The company is responsible in overseeing US$32 billion worth of funds. On the other hand, HSBC Private Bank acquired added US notes when 10 year yields rose to 2.5%. The European private bank oversees US$480 billion in assets. Deutsche Asset & Wealth Management manages about US$1.3 trillion bet that the American rates would remain subdued. The fund holds debt that would mature in less than four years.
Last month, records showed that US$79.8 billion of withdrawals from bond funds. Foreign investors resisted the market's 3.2% slump in May and June. This was after holdings of Treasuries reached double to US$5.6 trillion in the past five years. The Federal Reserve signaled slowing down the pace of asset purchases this year. This resulted to higher yields offered in the world's largest and most actively traded debt market. This was relative to other developed nations in three years.
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