Bonds

Fund manager Michael Hasenstab lost $3 billion in Q3 betting on Argentina and Treasury yields

Argentina's "Macrisis," which has sent its currency spiraling lower and cut the value of its bonds by more than half their value, and the implosion of U.S. Treasury yields cost Franklin Templeton’s flagship $100 billion Global Bond Fund $3 billion in the 3rd quarter, public filings data show.

What happened: The fund, managed by Michael Hasenstab, was heavily invested in Argentinian local-currency bonds, which defaulted in August, and a huge short position on U.S. Treasuries, which have seen prices rise significantly, Bloomberg reported.

September's market reversal on stocks and Treasury bonds

Data: Investing.com; Chart: Axios Visuals

Stocks have steadily risen over the course of September, with the S&P edging up by around 3% month to date, while safe-haven U.S. Treasury prices have fallen, pushing yields higher, in a sign of investors' increasing appetite for risk.

Why it matters: The pickup in stock buying so far this month has been a major reversal of the trend seen in markets for most of the year. Capital flows had largely been going into bonds and money market funds and out of stocks.