Rise in Retail Investor Sales of U.S. Long-Term Treasury ETFs
Retail investors are selling U.S. long-term Treasury ETFs in large volumes as prices increased slightly compared to the beginning of the year. According to data from the Korea Exchange, 'ACE 30-Year U.S. Treasury Active (H)' saw net sales of 56.5 billion KRW over the past month, which equates to 40% of the net purchases made from January to August. This selling trend has been fueled by rising yields following the Federal Reserve's interest rate cuts. However, experts suggest it will be challenging for the yields on U.S. long-term Treasury ETFs to improve significantly in the short term.
Additionally, 'TIGER 30-Year U.S. Treasury Strip Active (Synthetic H)' and 'TIGER 30-Year U.S. Treasury Covered Call Active (H)' reported net sales of 27.8 billion KRW and 15.7 billion KRW, respectively. As this selling pressure continues, the U.S. federal government shutdown has further increased economic uncertainty. Amid rising uncertainty, the FOMC is more likely to decide on its monetary policy without reviewing existing economic indicators.
ETFs tied to the Japanese yen are also being hit by the depreciation of the yen. The yields of 'RISE 30-Year U.S. Treasury Yen Exposure (Synthetic H)' and 'ACE 30-Year U.S. Treasury Yen Exposure Active (H)' have decreased due to the weaker yen. This is closely linked to Japanese political situations, and retail investors are also showing a selling trend in the 'iShares 20+ Year U.S. Treasury JPY Hedge ETF (2621)'.
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