Concerns over prolonged high interest rates have driven significant investments from Seohak ants (Korean retail investors buying foreign stocks) into exchange-traded funds (ETFs) focused on ultra-short-term U.S. Treasury bonds.
According to data from the Korea Securities Depository on September 10, Seohak ants, Korean retail investors buying foreign stocks, purchased $146.5 million (approximately 196.3 billion Korean won) worth of SGOV (ISHARES 0-3 MONTH TREASURY BOND ETF), which invests in U.S. short-term Treasury bonds with maturities of three months or less, from the beginning of this month until September 9.
This ETF ranked third in terms of purchase volume by Seohak ants, Korean retail investors buying foreign stocks, following SOXL (DIREXION DAILY SEMICONDUCTORS BULL 3X SHS ETF, $1.0772 billion) and Tesla ($153.37 million).
SGOV is a parking-type ETF that invests in U.S. short-term Treasury bonds with maturities of three months or less. Even if interest rates rise, the bond prices remain relatively stable. Additionally, it provides monthly dividend interest.
During the same seven trading days from August 3–11, Seohak ants, Korean retail investors buying foreign stocks, had a net purchase ranking of 13th for SGOV ($127.41 million), but their buying momentum intensified significantly within a month.
At the beginning of last month, Seohak ants, Korean retail investors buying foreign stocks, primarily invested in large AI and semiconductor stocks such as SOXL (1st, $787.23 million), Micron (2nd, $259.54 million), and SanDisk (3rd, $551 million). However, the investment trend has shifted.
Generally, when market uncertainty increases or the likelihood of rising interest rates grows, preference for short-term bonds strengthens. As investor interest in U.S. short-term bond ETFs has risen, domestic asset management companies have also launched ETFs that combine U.S. short-term bonds.
Mirae Asset Global Investments recently introduced two products: the ‘TIGER Samsung Electronics SK Hynix U.S. Treasury Bond Mixed 50’ and the ‘TIGER U.S. S&P 500 U.S. Treasury Bond Mixed 50.’ Both allocate half of their assets to U.S. Treasury bonds with remaining maturities of one year or less.
A source from Mirae Asset Global Investments explained, “U.S. short-term Treasury bonds have relatively low price volatility due to their short remaining maturities and allow investors to target interest income. Especially in long-term investments, the combination of growth potential and stability is as important as short-term returns from specific assets.”
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