(Bloomberg) — America’s super-rich hold fewer U.S. government and municipal securities than they’ve done for almost two decades, according to recent data from the Federal Reserve. 

According to the June report, the wealthiest 1% had $887 billion in assets. That’s a decrease of $1.5 trillion from 10 years ago. 

Americans at the bottom of income ladder are also trimming their assets. In June 2019, the public and municipal debt held in the top 99% of households was at its highest point, and it has declined by more than $400 billion.

In order to get tax relief on interest income, higher-earners tended to invest in municipal bonds. 

But with rates on Treasuries and munis near historic lows, it’s likely that they “searched for higher yields elsewhere, whether via equities, high-yield or investment-grade debt, private credit, non-fungible tokens, crypto, etc.,” said Peter Boockvar, chief investment officer for Bleakley Advisory Group.

The Benchmark 10-year Treasuries currently trade around 1.55%. That’s up from the all-time trough they hit last year, but still just a fraction of the long-run average. Since then, inflation has been over 5%.

“Higher-income households are likely well aware that they are receiving negative real returns on U.S. government and municipal securities,” said Chris Ahrens, a strategist at Stifel Nicolaus & Co.

According to the Fed, the top 20% households owned 74.2% U.S. government securities and municipal securities. This is the lowest percentage in U.S. records that date back to 1989. 

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