NEW YORK, March 20 (Reuters) - Investors stepped up their U.S. Treasury debt holdings after that market’s steepest weekly sell-off since last summer because of signs of an improving U.S. economy and less turbulence from Europe’s debt crisis, a survey released on Tuesday showed.
The U.S. government debt market lost 1.12 percent last week, according to Barclays Capital, as pension funds, insurance companies and other large fund managers shifted money into stocks and other growth-oriented investments.
The share of investors who said on Monday they are long, or owning more Treasuries than their portfolio benchmarks, rose to 25 percent from 21 percent the previous week, matching the level seen two weeks ago, J.P. Morgan Securities’ latest weekly Treasury client survey showed.
These long investors raised their holdings in U.S. Treasuries even as benchmark yields jumped to their highest in 4-1/2 months on Monday. The 10-year Treasury note yield closed at 2.375 percent on Monday after climbing to 2.392 percent intraday, according to Tradeweb.
In the wake of last week’s sharp market sell-off, the share of investors who said they are short U.S. government debt, or holding fewer Treasuries than their benchmarks, fell to 15 percent, down from 23 percent the prior week.
The percentage of investors in the survey who said they are neutral, or holding Treasuries equal to their benchmarks, rose to 60 percent from last week’s 57 percent.
Among active clients which include market makers and hedge funds, 23 percent said they were long Treasuries, up from 8 percent the prior week. About a month ago, none of them said they were long Treasuries.
The share of active clients who said they own fewer Treasuries than their benchmarks fell to 23 percent from 31 percent the previous week.
The percentage of these active traders were said they have neutral weightings in Treasuries fell to 54 percent from 62 percent the prior week, according to J.P. Morgan.