As Dollar Wavers... New Star Of Safe Haven Assets, Euro·German Bonds

Euro and German bonds emerging as alternative assets to the Dollar and US Treasuries (Source: The Telegraph)

Trust in US assets has declined due to President Trump's tariff aggression, changing the global safe asset landscape. As US Treasuries and the Dollar, long considered an 'absolute haven', waver, global funds are diversifying into non-US assets such as German and Japanese bonds, the Euro, and the Swiss Franc.

Recently, US Treasuries have fallen significantly. In particular, the 30-year bond ETF has dropped more than 7% in a month, creating a reluctance to purchase even among the wealthy in Gangnam. The increase in interest rates (price drop) was a direct hit. The same goes for the Dollar. The Dollar index has dropped below 100, and Dollar ETFs are on a continuous decline. Experts emphasize the need to diversify into non-US assets, stating “it's no longer possible to defend with only US assets.”

The most notable alternative is German bonds. As trust in Europe’s largest economy combines with rising interest rates, demand is concentrated. Japanese bonds are also emerging as a haven with Yen appreciation, and a strategy of short-term purchases and subsequent long-term conversion is recommended. Especially, it is possible to trade easily via ETFs, and products like 'IGOV' and 'PLUS Japan Yen Short Term' listed on the US stock market are highly practical.

There are also currencies filling the void of the Dollar. The Swiss Franc-based ETF ‘FXF’ and Euro-based ‘FXE’ have recently risen by 7.1% and 4.3% respectively, setting new 52-week highs. This indicates that investment demand aiming to respond to US-origin uncertainty is shifting to non-Dollar assets.

Experts believe this trend will continue. Bun-young Lee, a director at Luten Global Asset Management, advised, “Investors with a high proportion of US stocks need to diversify their portfolios around core industries with technological barriers, like European defense and power sectors.”

The era of Dollar-centered safe assets is ending, and a multi-polar asset environment is emerging. With intersecting tariffs, interest rates, and political uncertainties now, it is time for investors to search for a new ‘Digital Fort Knox’.