October 5, 2018

General U.S. Treasury Funds Suffer Worst Weekly Net Outflows in Over Three Years

by Patrick Keon.

For Lipper’s fund-flows week ended Wednesday, October 3, its General U.S. Treasury Funds peer group (including both mutual funds and ETFs) saw over $1.6 billion net leave its coffers. This was the group’s highest net outflows since the fund-flows week ended March 4, 2015, when it had net-negative flows of $2.1 billion. Before the past week the peer group had been experiencing its second consecutive very strong year of net inflows. For 2017 General U.S. Treasury Funds took in $12.3 billion of net new money, followed by another $12.2 billion of net inflows for 2018 to date. These numbers represented the two highest annual net-positive flows for the peer group since Lipper began tracking the data in 1992.

The lion’s share of this past week’s net outflows for General U.S. Treasury Funds came from two iShares ETF products: iShares 20+ Year Treasury Bond ETF (TLT) and iShares 7-10 Year Treasury Bond ETF (IEF) had net outflows of $1.2 billion and $350 million, respectively. Those were the first net outflows in six weeks for TLT and its largest weekly net outflows since its inception in 2002. It was the third consecutive weekly net outflows for IEF, but the net-negative flows of $350 million did not even crack the list of its ten largest net outflows of all time. IEF and TLT are the largest funds in the General U.S. Treasury Funds classification, with $8.7 billion and $8.1 billion of assets under management, respectively.

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