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A $200 Million Hedge-Fund Trade in Your Bond ETF Is Normal Now

John Burbank, founder and chief investment officer of Passport Management LLC.

John Burbank, founder and chief investment officer of Passport Management LLC.

Photographer: Jacob Kepler/Bloomberg

Don’t be surprised if you see a huge chunk of cash simply evaporate one day from your exchange-traded bond fund. There’s a good chance it’s just a hedge fund cashing in on a bet.

An example of this can be found in BlackRock Inc.’s $5.1 billion long-term U.S. Treasuries ETF, which saw the greatest volume of withdrawals this year among similar funds. Among investors yanking cash was Passport Capital, the $4 billion hedge-fund firm run by John Burbank.