Investors bet $596M on Treasurys ETF amid trade war threat

As a global trade war looks increasingly likely amid rising tensions between the U.S. and China and Europe, investors late last week placed their bets on an ETF tracking Treasurys.

The iShares U.S. Treasury Bond ETF (GOVT) had record volume of 24 million shares, worth $596 million, on Friday, almost 10 times it daily average for the past years. The $6 billion fund took in $275 million on the day, the most since January 2017.

President Trump revived concerns about a global trade war with a threat to impose 20% tariffs on cars imported to the U.S. from the European Union.
A television news report shows U.S. President-elect Donald Trump making his victory speech as a trader monitors financial data following the U.S. presidential election inside the Frankfurt Stock Exchange in Frankfurt, Germany, on Wednesday, Nov. 09, 2016. Global markets were thrown into disarray as Donald Trump won the U.S. presidential election, shocking traders after recent polls indicated that Hillary Clinton would be the victor. Photographer: Alex Kraus/Bloomberg

The largest trade was a block of 10 million shares worth $251 million that came in after the market closed, according to Bloomberg data.

“Momentum players seem to be loading up on Treasurys ever since the 10-year yield broke downside of the 100 daily moving average early last week,” said Dave Lutz, head of ETFs at JonesTrading Institutional Services.

On Friday, President Trump revived concerns about a global trade war with a threat to impose 20% tariffs on cars imported to the U.S. from the European Union. That only added to anxiety in the market during a week in which investors had to weigh an escalation of trade tensions between the U.S. and China as the Federal Reserve signaled a faster pace of policy tightening.

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