Exchange traded funds that invest in U.S. Treasuries were actually set to rally on Monday after Standard & Poor’s downgraded its rating on government debt as investors sold riskier assets such as stocks and commodities and moved into gold and bonds.

Despite the S&P ratings cut, “we think it is vital to underscore the fact that the U.S. Treasury sector … remains the largest and most liquid fixed income market in the world with the greatest degree of price transparency and few genuine alternatives,” ETF manager BlackRock said in a statement over the weekend.

“While the events that led to the S&P downgrade are certainly of concern, we think the vast majority of investors will continue to utilize the Treasury yield curve as an effective credit risk-free benchmark against which credit spread issues can be judged,” BlackRock said.

“Treasuries will also continue to see a strong bid from institutional investors of all kinds (including banks) and will continue to serve their traditional role as a hedge to risk assets,” the investment manager added. “While a time may come when the credit risk-free status of Treasury bonds is diminished by continued policy missteps, we do not believe that the S&P downgrade signals that this moment has come now.”

ETFs tracking stocks and oil were set for large declines Monday in the wake of the S&P downgrade. Gold and U.S. Treasury ETFs were moving higher. [Stock ETFs Drop]

“Nothing is risk free anymore,” said Nicholas Colas, chief market strategist at ConvergEx Group. “All modern financial theory is built on the bedrock notion that there is a riskless investment alternative available to any investor who wants it. S&P’s decision puts a torch to that construct.”