Debt-focused investment managers have been struggling to efficiently switch around their holdings as the global bond market balloons on the heels of unprecedented central bank stimulus.
Trading in general has gotten more difficult as big banks reduce their market-making role in the face of new regulations. Also, investors are finding themselves all piled into the same trades as a result of monetary stimulus, pushed to buy riskier assets at historically high prices for any yield at all.
So don’t assume that some behemoth ETF trade is signaling the end of the world. Yes, it could mean the market’s completely falling apart, but it also may just be a big hedge fund changing around its wagers.