A strong start to the year for many of Europe’s biggest bond funds was all but wiped out by an abrupt sell-off in the region’s credit market, testing the mettle of investors who rely on the asset class for its steady returns.

Europe has been at the centre of the global bond market turmoil that began in mid-April. About €344 billion ($375 billion) was wiped off the value of eurozone government bonds when prices fell abruptly after rising for several months to record levels, according to Bloomberg News's index of eurozone sovereign bonds, which tracks the value of the bonds outstanding in the currency bloc.