Bond traders double down on non-inflation in US ETFs

Toronto

TRADING in two of the biggest exchange-traded funds (ETFs) that buy US government debt shows investors are backing away from bets on inflation picking up at the fastest pace this year.

Since October, wagers that the ETF share price will decline as a percentage of shares outstanding for BlackRock Inc's US$5.8 billion iShares 20+ Year Treasury Bond ETF fell 22.6 percentage points, according to data from research firm Markit Ltd. That's the most all year and more than any drop in all but one equity-focused fund among 241 ETFs with assets of more than US$1 billion. At the same time, short interest as a percentage of shares outstanding on the US$6.5 billion iShares 7-10 Year Treasury Bond ETF increased 6.5 percentage points, more than all but one non-bond related fund.