nvestors fled the biggest government bond exchange-traded fund at the fastest pace ever during the recent sovereign-debt selloff.

The $4.3 billion iShares 20+ Year Treasury Bond ETF saw investors withdraw $1.7 billion of cash in the six weeks ended June 5. That was nearly 30 percent of its market capitalization, and the worst six-week string of outflows since its 2002 inception. The exodus left it with a net $1.8 billion of outflows so far this year, the most of any bond fund, according to Bloomberg data.

“It’s going along with the overall Treasury market,” said Aaron Kehoe, managing director of fixed-income operations for Cantor Fitzgerald LP’s ETF business in New York. “You’ve had a decent selloff in the past few weeks.”….

Read the Full Article