Bloomberg's ETF analyst says the inflows chasing long-duration Treasuries lower have historically been the wrong trade, a direct shot at anyone averaging down right now.
SWEET TEMPTATION: Money keeps pouring into $TLT as it keeps going down, and the more it goes down the more tempting it gets, like a bowl of ice cream and each 1% move down is another topping and you're starving. If history is any guide it's best to just walk past the ice cream https://t.co/bZUwU64Ouu
Money is crowding into duration ahead of the next Fed move, with bond funds pulling 62% of all ETF flows off just 15% of assets. Cash, munis, high yield and Treasuries all drew buyers, making this a broad rotation.
Bond ETFs seeing outsized inflows the past 5 days, taking in $23 billion which is 62% of net flows despite making up 15% of assets. Also they accounted for 6 of the top 8 products- all types too cash, munis, high yield, treasuries. and of course $TLT. No trader who loves to https://t.co/xz7qkQEYSV
Traders have staked $7 billion on a long-duration bond bet just hours before the Fed decision, and Bloomberg's ETF analyst says the payoff rarely covers the bleed.
The endless allure of $TLT (the fav ETF of ppl who like to overthink things) in effect as traders pour $7b in ahead of Fed. This thing largely burns cash but once in a while it goes into jackpot mode. Here's clip of @NateGeraci on ETF IQ on why it's just not worth the risk https://t.co/jzw5tZt6lp
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