The largest August inflow into a long-dated Treasury fund appears to have the fingerprint of Fisher Investments. Bloomberg data and market analysis show that, earlier this month, $4 billion moved into the iShares 20+ Year Treasury Bond ETF. Around the same time, $4 billion came out of the iShares 7-10 Year Treasury Bond ETF, which is known by the ticker IEF.
The two fund swings, taken together, look like one large investor switching from shorter-dated government debt to the very long end. Fisher Investments, the Plano, Texas firm founded by Ken Fisher, held close to $15 billion of IEF at end-June, according to regulatory filings. That made it the fund's largest shareholder and the only known investor with enough shares to produce a $4 billion outflow on its own.
"It would appear some model of theirs went longer on duration," said Todd Sohn, chief ETF strategist at Baird Strategas. "Nobody else can move those funds in size like that."
The firm's spokesperson declined to discuss specific positions, citing fiduciary duty to clients. BlackRock also declined to comment.
The trade was a contrarian one. At the time, 30-year Treasury yields were at their highest point since 2007. Because bond prices move opposite yields, holders of long-term debt had already suffered through tough streak.
But that also meant the Treasury market was thought to have priced in an ugly trend. For an investor willing to be wrong directionally, the risk might be worth a chance.
Fisher also has some written views that he has with such value. In an Aug. 12 article titled "Why Treasurys Aren't in Trouble," Fisher's editorial staff argued that this year's rising inflation was narrow and tied to energy prices connected to the Iran war. The firm called anxious bet in the long-dated space "false wealth risk," and the article took that view into the long bond market.
"Rates may be at the upper end of the multi-year range since 2022, but that is largely a function of false inequality risk tied to the war," the article said. "Inflation expectations are a key factor swaying long rates. Hence, we wouldn't expect hotter inflation or materially higher rates."
The timing turned out well, at least in the gap. After the bundle of money moved, the US Treasury announced it would increase its buyback of long-term government debt. Thirty-year yields at that point tumbled by 10 basis points, sparking a rally in the long end.
For Fisher Investments, this bet is still small inside a giant footprint. The firm manages $441 billion in total assets. ETF flows are a piece of that; they don't exist in the entire portfolio, and offsetting trades may well exist. But a single large player shifting billions out of one ETF and into a few others in a day shows how easily wealth management can move market-adjacent instruments.
The trade also highlights a old debate in the bond market: should investors stretch for yield? The 20+ Year Treasury ETF offers much more excitement than a shorter-duration flagship, but it is also far more dangerous if yields keep going up. The Fisher move says the opposite side can be good when long-term yields are already high.
Ken Fisher built his asset from decades of blunt public views and a colorful marketing machine. Some of those calls worked; some have not. This time, he is betting that the inflation narrative breaks quickly and the time is right for a very-long-term bond rally.
If that view hits, the payout thing? People who follow that strategy could be rewarded. If it doesn't, the losses stack up to the worst of it. Either way, the trade is a radical example of how one investor can make billions in a single ETF flow - and how much confidence in cheap bond valuations is for Fisher right now.