A scorching selloff in Treasuries just propelled a record wave of dip-buying in an exchange-traded fund tracking the longest-dated bonds.

Investors poured more than $1.6 billion into the nearly $19 billion iShares 20+ Year Treasury bond ETF (ticker TLT) on Friday, according to Bloomberg data. That’s the biggest one-day influx since its 2002 launch. The fund’s price has dropped more than 11% this year, despite Friday’s 1.2% rally.

Treasury yields have shot higher across in the curve in 2022 as the Federal Reserve dialed up expectations for higher interest rates to tamp down on soaring inflation. While the most dramatic moves have taken place in short-dated securities -- the tenors most sensitive to policy expectations -- rates on longer-dated bonds have also climbed to pre-pandemic highs in the span of a few months. These long-term bonds will likely continue to cheapen, and their yields will rise, as the central bank reduces its debt holdings this year.

But with hawkish monetary moves increasingly priced in, investors fading the selloff have good reasons to buy TLT, according to Leslie Falconio of UBS Financial Services.

“Now that the Fed has become fairly aggressive, there is a normalization of the yield curve so I do understand why people really would want to stop and take on some interest-rate risk at the levels,” Falconio, the firm’s head of U.S. fixed-income asset allocation, said in a Bloomberg Television interview.

Longer-dated yields are also being pushed higher with the prospect of more corporate debt sales, such as GlaxoSmithKline Plc’s seven-part deal. The 30-year rate climbed to just shy of the peak seen last week after the Fed raised rates.

The uncertainty over the war’s impact on economic growth could also explain the mega-flow into TLT, according to Bloomberg Intelligence’s Eric Balchunas. A less-robust expansion of the economy supports longer-dated debt, and might prompt the Fed to dial-back some of its tightening plans after policy makers signaled they expect to raise rates six more times this year, he said.

This article was provided by Bloomberg News.