(Bloomberg) -- The surge in Treasury yields has cooled down, but exchange-traded funds tracking the bond market are showing tensions might be building under the surface.
Investors put $2 billion into the Vanguard Short-Term Treasury ETF (ticker VGSH) and about $660 million into the Schwab Short-Term U.S. Treasury ETF (ticker SCHO) last week -- a record for both funds, according to data compiled by Bloomberg. Meanwhile, traders rushed out of the iShares 20+ Year Treasury Bond ETF (ticker TLT), which tracks longer-dated debt and bled nearly $1 billion in the span.
This year’s Treasury selloff slammed funds that focus on longer duration -- a measure of sensitivity to interest-rate changes -- spurring billions of dollars in withdrawals. Though bond investors have gotten a reprieve over the last month as yields have drifted lower, there’s still caution around stepping into long-dated debt as the U.S. economic picture continues to brighten.
“The spike in rates earlier this year clearly spooked some investors, who are now reevaluating the risk-reward of owning duration,” said Nate Geraci, president of advisory firm The ETF Store. “Investors are becoming much more reluctant to stand in front of the rate freight train. There’s no question the bias is towards owning shorter duration.”
Persistent bearish wagers against TLT tell a similar story. Short interest in the ETF is nearly 19% of shares outstanding, close to the highest level since 2017, data from IHS Markit Ltd. show. TLT has sank over 11% so far this year, after surging 16% in 2020. Meanwhile, VGSH and SCHO are both little changed year-to-date.
The rush into short-duration Treasury ETFs coincides with a rotation out of popular stock funds, notes Bloomberg Intelligence’s Eric Balchunas. Investors pulled $8.7 billion from the $357 billion SPDR S&P 500 ETF Trust (ticker SPY) last week -- the most since September -- while the $164 billion Invesco QQQ Trust Series 1 (ticker QQQ) posted weekly outflows of $2.6 billion.
“This smells like some nerves showing and maybe some profit taking by the trading crowd given the outflows we are seeing from some of their favorite equity ETFs, which have started to move sideways after a big surge in early April,” BI strategist Balchunas said.
This means, you take one article, and you use the article distribution system. It will generate thousands of unique versions of your article, and publish those unique articles to hundreds of websites that are related to your niche.
Take a look at our comprehensive guide to the best and most popular information ebooks and products available today on Detoxing, Colon Cleansing, Weight Loss and Dating and Romance. They are all in one spot, easy to find and compere to make a quick selection for the product that best fits your needs or wants.
So browse through a category and make your preferred selection and come back here to read more choice articles and get a few more helpful tips on ways to help your enhancement.
As an Amazon Associate I earn from qualifying purchases. “saubiosaubiosuccess.com is a participant in third party affiliate and advertising programs; The Amazon Services LLC Associates Program, Awin network, and other affiliate advertising programs are designed to provide a means for sites to earn advertising fees and commissions by advertising and linking to products on other sites and on Amazon.com. Amazon and the Amazon logo are trademarks of Amazon.com, Inc, or its affiliates.”
We use anonymous cookies and various 3rd-party services to optimise and to offer you a better, more personalised, browsing experience with advanced accessibility enhancements.
Dismiss
Always active
The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
Preferences
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
Statistics
The technical storage or access that is used exclusively for statistical purposes.The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
Marketing
The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.
