(Bloomberg) -- At least one big investor is jumping into long-dated Treasuries with both feet.
More than $1.5 billion poured into the $28 billion iShares 20+ Year Treasury Bond ETF (ticker TLT) on Thursday, the second-largest one-day inflow in its history. Over half of that influx can be tied to a single trade: roughly 8.1 million shares worth $851 million changed hands at 4:06 p.m. in New York, according to Finra data compiled by Bloomberg.
The massive block trade comes a day after Federal Reserve Jerome Powell took the stage at the Brookings Institute on Wednesday to say that the time to dial back the pace of interest-rate hikes could come at this month’s policy meeting. That potential slowdown, combined with fears of a looming recession, sparked a sharp rally in bonds, sending TLT to its highest level since September on Thursday.
“My guess is someone is trying to increase the duration exposure of their portfolio, maybe after the Fed this week has been signaling that they will be slowing hikes or hiking less aggressively,” Bloomberg Intelligence ETF analyst James Seyffart said. “It’s possible that multiple large players combined with smaller players to cause the $1.5 billion inflow, but there was at least one big fish involved.”
But those who piled in were dealt a quick blow two days after Powell’s speech. TLT briefly dropped after Friday’s stronger-than-expected jobs report, which showed that US employers added more workers and boosted wages more than expected, adding to inflationary pressures.
Despite posting losses of 27% on a total return basis, TLT has absorbed roughly $16.5 billion so far in 2022, putting the fund on track for its biggest year of inflows ever. Roughly $2.9 billion of that influx has come over the past month, with hopes of a Fed pivot driving a 10% rebound in TLT.
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