Hedge funds in the Cayman Islands held more Treasuries at end-2024 than US official data show, with their ownership likely to be $1.4 trillion higher than reported, according to researchers at the Federal Reserve.

The funds’ holdings had increased by $1 trillion since 2022 to reach $1.85 trillion by end-December, the researchers including Daniel Barth and Daniel Beltran wrote in an Oct. 15 note. A report from the Department of the Treasury put the funds’ ownership at $423 billion.

The Fed researchers said their figures showed the Cayman Islands is the largest foreign owner of US government securities, ranking ahead of China, Japan and the UK.