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Asset managers and hedge funds split over bond market outlook

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Hedge fund managers and asset managers are more divided on their outlook for benchmark Treasuries than they have been since late 2018, when the Federal Reserve’s tightening cycle was about to peak, according to a report by Bloomberg.

The report cites data from the Commodity Futures Trading Commission as revealing that leveraged funds are bearish on 10-year bonds, while asset managers are bullish, with net-short leveraged positions having grown to their highest level since since 2019. More bullish institutional investor counterparts meanwhile, have seen net long positions climb to a record, in data, going back to 2006.

The rise in short leveraged positions comes amid mounting speculation, among hedge mangers at least, that the Fed will soon call an end to its programme of big rate hikes. Buy and hold investors like asset managers meanwhile, seem to be stuck on the appeal of the highest interest payments on benchmark notes in more than a decade.
 

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