Increased Bond Investment in ETFs: Confidence in U.S. Treasuries
Despite the downgrade of the U.S. credit rating, individual investors are continuing to buy ETFs holding U.S. 30-year Treasury bonds. This trend reflects investor confidence in the long-term stability of these bonds and expectations of price increases. Over the last two weeks, the net buying of these ETFs by individual investors in Korea accounted for more than 20% of the annual total, indicating anticipation of further gains in U.S. long-term bond yields.
Amid growing uncertainties in domestic and global stock markets, ETF investors are shifting from equities to bonds and short-term funds. Last month, there was a net outflow of 524.2 billion won from equity ETFs, while bond and short-term money market ETFs saw inflows of 1.89 trillion won and 1.66 trillion won, respectively. This shift is driven by increased demand for U.S. Treasury bonds at current attractive prices and rising yields on the 30-year bonds. As volatility increases, investors are favoring relatively safer assets like bonds over equities.
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