Fisher Investments appears to be the force behind a $4 billion inflow into BlackRock's iShares 20+ Year Treasury Bond ETF (TLT) in August, coinciding with a similar $4 billion outflow from the iShares 7-10 Year Treasury Bond ETF (IEF). This strategic shift suggests a move from shorter-dated government debt to the very long end of the yield curve, a contrarian bet as 30-year Treasury yields were at their highest since 2007.
Regulatory filings show that Fisher Investments held approximately $15 billion in IEF at the end of June, making it the fund's largest shareholder and the only investor capable of such a large outflow. This trade was a high-risk, high-reward move, as long-term bond prices move inversely to yields, meaning if yields continue to rise, losses would be pronounced, but if they fall, appreciation would be substantial. Analysts like Todd Sohn of Baird Strategas noted that such a large movement points to a model-driven increase in duration by Fisher.
Fisher Investments' editorial commentary from August 12, titled "Why Treasurys Aren't in Trouble," argued that recent inflation is narrow and linked to energy prices and the Iran war, not broad-based. The firm stated that rates might be at the upper end of their multi-year range since 2022 due to "false inequality risk" tied to the war, and they do not expect hotter inflation or materially higher rates. The timing of their trade proved favorable initially, as the US Treasury subsequently announced an increase in long-term government debt buybacks, causing 30-year yields to tumble by 10 basis points and sparking a rally in long-dated bonds. This $4 billion move, while significant, represents a small fraction of Fisher Investments' total managed assets of $441 billion.
