Investors Shift from Short to Longer-Duration Treasury ETFs Amid Economic Resilience

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In a sign of changing investor sentiment, more than $1 billion has been withdrawn from PIMCO’s ultrashort US Treasury ETF, the PIMCO US Dollar Short Maturity UCITS ETF (MINT), this month. As of November 17, data from ETFbook shows substantial outflows from MINT, highlighting the increasing demand for longer-duration investments.

MINT is an actively managed ETF benchmarked against the ICE BofAML US 3-Month Treasury Bill index and currently has an effective maturity of 0.18 years with an estimated yield of 6.4%. Additionally, the iShares $ Treasury Bond 1-3yr UCITS ETF (IBTS) witnessed $260 million in net redemptions during the same period.

ETF Newz Says:

The shift from shorter to longer-duration Treasury ETFs reflects the ongoing challenge faced by fund selectors in determining when to add duration risk to portfolios. Despite the US economy’s unexpected resilience, signs of cracks are emerging, particularly in consumer credit, with rising delinquencies in credit cards and elevated auto loan levels. As a result, locking in duration at higher interest rates has become a priority for some investors.

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