Investors are increasingly rotating into U.S. Treasury ETFs as market volatility undermines confidence in traditional defensive assets. According to the report, net inflows into U.S. Treasury ETFs reached about $30 billion in March, more than double the recent monthly average, highlighting a sharp rise in demand for liquid and lower-risk exposure.
Ultra-short Treasury ETFs lead the move
Bloomberg Senior ETF Analyst Eric Balchunas said demand has been especially strong for ultra-short Treasury products such as SGOV and BIL. These funds typically hold very short-dated U.S. government debt, making them appealing to investors looking to reduce duration risk while preserving liquidity during periods of market stress.
Traditional safe-haven assumptions are being tested
The shift comes as U.S. equities have declined and gold has failed to meet expectations as a reliable hedge. The report notes that the presumed “zero correlation” between stocks and gold has broken down, complicating portfolio defense strategies and pushing investors to search for alternative places to park capital.
With fewer dependable safe-haven choices available, some analysts have suggested that holding cash may also be a prudent approach in the current environment. Treasury ETFs, however, offer investors a way to stay highly liquid while maintaining exposure to U.S. government-backed assets through exchange-traded vehicles.
Berkshire Hathaway adds to the signal
Market attention has also been drawn to Berkshire Hathaway’s recent purchase of $17 billion in U.S. Treasury bonds. That move has been viewed as a strong institutional endorsement of Treasuries’ defensive qualities, particularly at a time when investors are reassessing how to manage risk across asset classes.
Overall, the latest flows suggest that U.S. Treasury ETFs are regaining prominence as a core defensive allocation. If volatility in stocks persists and gold remains inconsistent, ultra-short Treasury funds may continue to attract investors seeking stability and flexibility.