Hedge funds are increasingly tying the fortunes of U.S. bonds to the rest of the world, which suggests that Treasury yields will stay low—or go even lower—in the near term.
These investors probably increased their Treasury holdings to record amounts over the past year. This is significant because these funds generally trade securities more frequently than sovereign wealth funds or central banks, which may make the debt more volatile day to day.
Hedge Funds' Total Assets Under Management: $2.9 Trillion
This isn't a completely surprising development: Hedge funds have more than doubled their assets under management since 2008 and now manage a record $2.9 trillion of assets, according to Hedge Fund Research. They need to find places to invest that money at a time of slowing growth and unfathomably low bond yields in Japan and Europe.
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