Just one day before the US Treasury unexpectedly announced an increase in the scale of long-term treasury bond repurchases, one or more investors on Tuesday bought an ETF that is highly sensitive to fluctuations in US long-term treasury bond yields. On the same day, the $1.5 billion PIMCO zero-interest US Treasury bond index ETF attracted a record inflow of $123 million, while trading volume jumped to 5.2 million shares, nearly double the previous peak set in 2024. The ETF invests in so-called “divestiture treasury bonds,” that is, zero-interest securities formed after separating bond principal and interest payments, so it can amplify bets on long-term interest rate trends in the US. The ETF rose 3.2% on Wednesday, the biggest increase since November 2024. However, as concerns about inflation and fiscal deficits have affected long-term treasury bonds, the fund has accumulated a 5.4% decline this year. The fund's bond positions are valid for about 28 years, which means that for every 1 percentage point drop in yield, its price will increase by about 28%.

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