The ProShares UltraShort 20+ Year Treasury ETF (NYSEArca:TBT), a
double-exposure inverse play on long-dated U.S. Treasurys, was one
of the most popular funds last Thursday, seeing assets jump nearly
6 percent on the same day both the S&P 500 and the Dow Jones
industrial average rallied to record highs.
Investors poured $187 million into TBT, making it the
second-most-popular ETF Thursday, pushing total assets up to $3.43
billion. The inflows into the world's biggest inverse and leveraged
fund also helped propel ProShares, the fund's sponsor, to leading
issuer in terms of inflows that day. Markets were closed
TBT is designed to serve up twice the inverse daily performance
of the Barclays U.S. 20+ Year Treasury Bond Index, the same
benchmark anchoring the $3.4 billion iShares Barclays 20+ Year
Treasury Bond Fund (NYSEArca:TLT), which interestingly, was also
among the day's top-10
, with inflows of $47 million.
The flows came on the same day the S&P 500 Index managed to
break above its 2007 high and close at a new record in what many
see as a reflection of a growing sense that the U.S. economy is in
a bona fide recovery mode following the 2008 credit crisis.
Renewed enthusiasm over U.S. equities has certainly fueled
concerns over the longer-term prospects for the bond market, as
rallying stocks might put pressure on long-term bond yields. Still,
there's still evidence the Treasurys market is perfectly healthy,
as recent data showing foreign central banks are big buyers
The Federal Reserve has vowed to keep official interest rates
and long-term yields low to help encourage borrowing and spur
economic activity, but there's growing uncertainties surrounding
the unwinding of quantitative easing measures that will help push
up bond yields, possibly with swiftness.
Investor demand for both TBT and TLT could also be an indication
of trending in the bond market, IndexUniverse ETF analysts have
suggested, pointing to a possible play on momentum in the
TBT, as noted, is the largest geared ETF on the market today,
having seen net inflows of $386.6 million year-to-date.
TLT, too, has gathered a sizable following, with net inflows
exceeding $525 million in the same three-month period, according to
data compiled by IndexUniverse.
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