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Hedge funds expanded Treasury holdings as purchases accelerated in 2026
Hedge funds held about $2.0tn of cash Treasuries at the end of 2025, nearly three times their five-year-ago level, and accounted for a record 7% of the roughly $28.9tn market.
Hedge funds have taken a larger role in the US Treasury market, helping absorb government debt as some traditional long-term investors reduce exposure, according to reporting by CNBC that drew on data from the US Office of Financial Research.
The data cited by CNBC shows hedge funds held about $2.0tn of cash Treasuries at the end of 2025, nearly three times their holdings five years earlier. With marketable Treasury debt at $28.9tn, hedge funds accounted for a record 7% of the market.
Federal Reserve data referenced by CNBC indicates that hedge funds increased their pace of buying into 2026, with domestic hedge funds purchasing a net $60.6bn of Treasuries in the second quarter, up from $26.4bn in the first quarter. That boosted net purchases for the first half to roughly $87bn.
The report also highlighted that the shift in the investor base matters as the Treasury market faced renewed pressure, with the 10-year yield reaching its highest level since 2007 and the 30-year yield climbing to its highest level since 2002. The impact is particularly significant for longer-dated government debt.