1.48 Trillion Won in a Week... The Top Pick of Seo-hak Ants Surpasses AI and Semiconductors [Practical Financial Technique]

U.S. Ultra-Short-Term Treasury ETFs in the Spotlight

Over 100 Billion Won Invested by Seohak Ants in the First Week of September

Ranked Third in Net Purchases Among Global Investors

Short-Term Bonds Less Sensitive to Interest Rate Flu

Amid the global trend of rising interest rates, exchange-traded funds (ETFs) that hold ultra-short-term U.S. Treasury bonds are drawing attention. South Korean retail investors who invest in U.S. stocks—known as "Seo-hak Ants"—have invested more than 100 billion won in these ETFs over the past week. In addition, ETFs combining U.S. short-term Treasury bonds have also been launched in the domestic market.

According to the Korea Securities Depository on September 9, between August 29 and September 4, Seo-hak Ants made net purchases of 110.15 million U.S. dollars (approximately 148.1 billion won) worth of “iShares 0-3 Month Treasury Bond ETF (SGOV)” within one week. This amount ranked first among their net purchases during the period. It exceeded the amount invested in Meta (ranked second at 62.7 million dollars) and Alphabet (third at 57.2 million dollars) by more than 50 million dollars each.

Global investors have also bought a large volume of SGOV. According to Samsung Securities, this product ranked third in weekly net purchases of U.S.-listed ETFs by global investors between August 28 and September 4, totaling 2.031 billion dollars.

SGOV is an ETF that invests in "ultra-short-term" Treasury bonds with a maturity of three months or less. This surge in popularity is interpreted as a response to rising interest rate concerns globally—including in the United States, Japan, and Europe—which have led to greater demand for short-term bonds that are less sensitive to rate changes. Bond prices move inversely to interest rates: as interest rates rise, newly issued bonds yield higher interest, resulting in a decline in the prices of existing bonds. However, short-term bonds, due to their brief maturity, experience much less price decline than long-term bonds when rates go up. Furthermore, SGOV pays interest on bonds monthly as dividends, enhancing cash flow for investors.

At the beginning of this year, Seo-hak Ants mainly invested in leveraged products with 2x or 3x leverage and large-cap AI and semiconductor stocks, but the trend has since reversed. Just a month ago, during the first week of August (1st to 7th), the top net purchases by Seo-hak Ants were Amazon (176.2 million dollars), SanDisk (161.44 million dollars), and Micron (111.04 million dollars). At that time, SGOV’s net purchases amounted to just 48.18 million dollars, ranking only 25th.

Riding this popularity, domestic asset management firms are increasingly launching ETFs that combine U.S. short-term Treasuries. Mirae Asset Global Investments released “TIGER Samjung Electronics SK hynix U.S. Treasury 50 Mix” on August 25 and newly listed “TIGER U.S. S&P 500 U.S. Treasury 50 Mix” on September 8. An official from Mirae Asset Global Investments explained, “U.S. short-term Treasuries have short remaining maturities, so they show relatively low price volatility in response to interest rate changes, and in addition to interest income, investors can expect exposure to the dollar due to fluctuations in the won-dollar exchange rate.”

While Money Market Fund (MMF) ETFs also serve as a "safe haven" for funds, ultra-short-term bond ETFs have the advantage of potentially providing slightly higher returns. According to CNBC in the United States, Christopher Coolidge, Chief Investment Officer (CIO) at Brookwood Investment Group, said, "Ultra-short bond ETFs can provide 75 to 110 basis points (1bp=0.01 percentage point) higher yield than money market ETFs with similar maturities and interest rate sensitivities."

This content was produced with the assistance of AI translation services.