Long-Term Treasury ETFs See Largest Outflows as Investors Reassess Fixed Income Holdings

Date: January 5, 2026

Market Overview

Today’s ETF outflows reflect a mixed picture of investor activity, with significant redemptions concentrated across fixed income and equity segments. The largest outflow occurred in the iShares 20+ Year Treasury Bond ETF (TLT), a long-duration bond vehicle, followed by equity-focused products like the iShares Russell 2000 ETF (IWM) and sector-specific funds such as the State Street SPDR S&P Biotech ETF (XBI). While Treasury outflows suggest potential caution around duration positioning, equity and sector ETFs with outflows may indicate profit-taking or shifting thematic preferences. No single asset class dominates the outflow pattern, though bond-related ETFs account for three of the top five outflows.

ETF Highlights

TLT - iShares 20+ Year Treasury Bond ETF As the largest outflow recipient with $509.5 million in redemptions, TLT—a long-duration Treasury bond ETF—may signal investor caution around extended-maturity fixed income. Despite a 0.34% price increase and $47.23 billion in assets under management (AUM), the outflow could reflect tactical rebalancing or sensitivity to evolving yield curve dynamics.

IWM - iShares Russell 2000 ETF The iShares Russell 2000 ETF, tracking small-cap equities, saw $272.8 million in outflows despite a 2.67% price gain. With $74.42 billion in AUM, the outflow may indicate profit-taking following recent performance or a strategic shift toward larger-cap or sector-specific exposures.

XBI - State Street SPDR S&P Biotech ETF The biotech sector ETF (XBI) experienced $246.5 million in outflows amid a 1.46% price decline. Its $7.84 billion AUM suggests the outflow could reflect sector-specific risk-off sentiment or reduced speculative interest in biotech equities.

PPA - Invesco Aerospace & Defense ETF The aerospace and defense ETF (PPA) faced $222.6 million in outflows despite a robust 5.55% price increase. The $7.05 billion AUM and strong performance may indicate profit-taking by investors capitalizing on sector strength.

TMFC - Motley Fool 100 Index ETF The Motley Fool 100 Index ETF (TMFC) recorded $222.3 million in outflows despite a 0.36% price rise. With $1.93 billion in AUM, the outflow—nearly 11% of its total assets—could signal shifting thematic preferences or reduced retail interest in the product.

GLD - SPDR Gold Shares The gold ETF (GLD) saw $200.8 million in outflows despite a 3.14% price increase. Its massive $149.01 billion AUM suggests the outflow may reflect profit-taking after a recent price rebound rather than a fundamental shift in gold demand.

HYG - iShares iBoxx $ High Yield Corporate Bond ETF The high-yield corporate bond ETF (HYG) faced $193.3 million in outflows despite a 0.31% price gain. The $19.89 billion AUM and modest performance may indicate a rotation toward other fixed income strategies or risk-off positioning.

EMB - iShares J.P. Morgan USD Emerging Markets Bond ETF The emerging markets bond ETF (EMB) recorded $163.7 million in outflows amid a 0.18% price rise. Its $16.57 billion AUM and regional focus could suggest reduced appetite for emerging debt amid evolving capital flows.

ARKK - ARK Innovation ETF The innovation-focused ETF (ARKK) saw $159.7 million in outflows despite a 5.75% price increase. The $7.10 billion AUM and strong performance may indicate profit-taking by investors capitalizing on thematic momentum.

LQDH - iShares Interest Rate Hedged Corporate Bond ETF The interest rate-hedged corporate bond ETF (LQDH) faced $112.1 million in outflows despite a near-flat 0.03% price change. Its $541.26 million AUM and niche structure may reflect reduced demand for hedged bond strategies.

Notable Trends / Surprises

The top outflow list includes three Treasury-related ETFs (TLT, HYG, EMB) and four equity/sector products (IWM, XBI, PPA, ARKK), suggesting a blend of fixed income caution and equity profit-taking. The presence of both long-duration Treasuries and high-yield corporates in outflow ranks highlights divergent investor priorities across the bond spectrum. Meanwhile, the Motley Fool 100 ETF’s significant outflow relative to its size underscores potential shifts in retail-driven thematic allocations.

Conclusion

Today’s outflows may indicate a cautious approach to long-duration fixed income and selective profit-taking in equity and sector ETFs. The mixed performance across the top 10—ranging from strong price gains in PPA and ARKK to declines in XBI—suggests investors are actively rebalancing portfolios rather than adopting a uniform market view. The scale of outflows in large-cap products like TLT and IWM, alongside niche funds like TMFC and LQDH, could reflect both macro positioning and tactical adjustments within specific themes or strategies.