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.
The largest trade was a block of 10 million shares worth $251 million that came in after the market closed, according to Bloomberg data.
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Anticipating volatility and its implications could make a big difference.
February 22 -
Debt is back on the rise, this time led by government.
April 9 -
The fund took in 100 times its average weekly amount after the latest jobs and wage data showed tepid inflation growth.
March 20
“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.
The strategy draws investor interest again, mostly on the strength of fixed income.
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.
