Right so, this…
… apparently has a tendency to discourage diversification.
At least where we’re comparing iShares 20+ Year Treasury Bond ETF (TLT) AUM to Vanguard Total Stock Market ETF (VTI) AUM as a proxy for diversification.
Meanwhile, evidence suggestions that investors started to increase allocation to long term treasury, which could continue as inflation expectation is suppressed by commodities market (Exhibit 1). The market value of iShares 20+ Year Treasury Bond vs. Vanguard Total Stock Market ETF hit a 3-year low in March 2017 (black line in Exhibit 1) and starts to move up.