Treasury ETF TLT took in $1.5B in one day after last week's speech from Fed Chair Powell
The popular Treasury-focused exchange traded fund iShares 20+ Year Treasury Bond ETF (NASDAQ:TLT) experienced a surge of investor capital on Thursday of last week, as a focus on the Federal Reserve's interest rate policy shines a spotlight on the Treasury market.
In the fund's second largest influx of cash in one trading day, TLT took in $1.5B last Thursday. Meanwhile, more than half of that inflow can be linked to a massive $851M block trade, according to Bloomberg data. In total, TLT has $30.1B assets under management.
The influx of funds came after a highly publicized speech from Fed Chairman Jerome Powell last Wednesday, in which he stated, “The time for moderating the pace of rate increases may come as soon as the December meeting." In the wake of these remarks, the Treasury market saw a wave of buying, which sent yields sharply lower and TLT higher.
Since Powell’s statement, the U.S. 10 Year Treasury yield (US10Y) has declined by 28 basis points to 3.45% and TLT marched higher by 6.9%.
As Wall Street anticipates a 2023 recession, the bond market has become an attractive landscape for some.
Aside from TLT, here are some other Treasury ETFs that could be in focus: (NASDAQ:IEI), (NASDAQ:IEF), (NASDAQ:SHY), (GOVT), (VGSH), (VGIT), (SCHO), (SCHR), (SPTL), (TLH), and (VGLT).
While some believe in higher rates in order to combat elevated levels of inflation, high-profile investor Cathie Wood says the “Fed is making a serious mistake.”