Growing Interest in US Treasury Bonds... Korea Investment & Securities Sells 400 Billion Won So Far This Year

Korea Investment & Securities, a subsidiary of Korea Financial Group, announced on the 16th that the scale of U.S. Treasury sales to individual investors this year has reached 400 billion KRW. This surpasses half of last year's total sales amount (720 billion KRW) in just over 40 days since the start of the new year.

Korea Investment & Securities Headquarters. (Provided by Korea Investment & Securities)

The popularity of these U.S. Treasuries is mainly attributed to expectations that the U.S. Federal Reserve (Fed) will begin cutting benchmark interest rates this year. When interest rates are lowered, bond prices rise, so investing in bonds or bond-based products can yield not only interest income but also capital gains.

Additionally, direct investment in individual bonds is advantageous because interest income is taxable, but capital gains and foreign exchange gains are tax-exempt. For high-net-worth individuals subject to comprehensive financial income taxation, direct bond investment is more favorable than related exchange-traded funds (ETFs) when considering costs and taxes.

Korea Investment & Securities is selecting and selling low-coupon U.S. Treasuries with a coupon rate below 1%, considering this investment trend and the U.S. Treasury market’s abundant liquidity compared to the domestic market. They have enhanced accessibility for individual investors through their proprietary overseas bond online brokerage service via the 'Korea Investment' application and overseas bond trading services using Toss Bank, as well as improved trading convenience through reservation order acceptance.

A representative from Korea Investment & Securities stated, "Demand for U.S. Treasuries is steadily increasing as part of expectations for interest rate cuts and tax-saving strategies. We will continue to select and supply high-quality bond products and actively support customers’ easy investments to lead the bond investment culture."