We highlighted the presence of “Treasury Bond Bears” in recent recaps as well, and this trade was prevalent once again last week as ProShares UltraShort 20+ Year Treasury Bond (NYSEArca: TBT) was one of the leaders in asset inflows, taking in over $250 million in new assets via creations. Recall that we had mentioned size call buying in TBT, increased trading activity in related leveraged bearish ETF, Direxion Daily 20 Year Plus Treasury Bond Bear 3X (NYSEArca: TMV), and large put buying in iShares 20+ Year Treasury Bond (NYSEArca: TLT) in the past few weeks and Treasury Bonds largely collapsed (prices fell sharply and yields rose) two weeks ago following the recent Fed rate decision.
Treasuries were bid up once again last week however, as TLT rose throughout the latter part of last week, finding significant support on its 200 day moving average, but the larger creation activity in TBT last week gives us some indications that the “Treasury Bond Bears” are still in the picture and are using the recent reversal in treasury prices as an opportunity to add to short positions.
In related activity, TLT was among redemptions leaders last week, with the fund losing about $170 million to outflows, and iShares Investment Grade Corporate Bond (NYSEArca: LQD) saw about $200 million leave the fund.
In sector ETFs, Technology Select Sector SPDR (NYSEArca: XLK), with its largest holding being Apple (NasdaqGS: AAPL) at 17.68%, also was among asset inflows leaders last week, seeing $150 million flow into the fund. AAPL is also the highest weighting in QQQ, at 15.65% and this ETF also saw heavy creation activity last week, with more than $300 million flowing into the fund. Technology continues to outpace the broad market in this first quarter of 2012 as well, with XLK rallying 17.83% thus far.
It seems feasible that there may be some “window dressing” occurring into these final days of the first quarter based on observable creation activity in Financial and Tech ETFs, being the performance leaders thus far in 2012 and managers funneling more cash into these winners in the past several sessions to ideally end the quarter on a high note. From an outflows standpoint, SPY led the way on the redemptions side, losing about $3 billion in assets last week, and sector specific funds were also active including XLI and XLB which lost about $500 million collectively last week.
SPDR Midcap S&P 400 (NYSEArca: MDY) also saw substantial redemptions, losing more than $350 million.
Finally, on a week that saw the U.S. Dollar fall rather sharply versus the Euro, with PowerShares U.S. Dollar Index Bullish (NYSEArca: UUP) falling below its 50 day moving average and trading at its lowest levels since early March, ETF flows suggest that institutions are using this drop to add to UUP exposure and cashing out of CurrencyShares Euro (NYSEArca: FXE) into the rise in the currency last week. UUP saw net creations of about $160 million whereas FXE saw nearly $200 million vacate the fund.
Also on the currency front, the Japanese Yen was rather active last week as well, as CurrencyShares Japanese Yen (NYSEArca: FXY) reversed course from its recent slide and bounced notably from one year lows, finishing the week on a high note and closing at $119.36. Nonetheless, more than $75 million left the ETF via redemptions last week despite this reversal in price action, equivalent to about 25% of the assets outstanding in the fund.
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