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UPDATE 1-More investors warm to a U.S. ultra-long bond -survey

Richard Leong

(Adds details of survey, industry background)

Aug 29 (Reuters) - More investors are warming to the idea of owning a U.S. Treasury bond that matures beyond 30 years, but most of them still prefer the U.S. Treasury Department to roll out a 20-year security over an ultra-long issue, a J.P. Morgan survey showed on Thursday.

Thirty-nine percent of the nearly 130 respondents said they would buy an ultra-long Treasury bond. This was more than the 19% who said they would do so two years ago, according to the survey. The respondents include banks, asset managers and hedge funds.

Half of those surveyed said they prefer a 20-year Treasury security in the latest survey. That figure was significantly lower than 73% two years earlier.

The rest of investors said they favor an ultra-long zero-coupon security, slightly higher than in the prior survey.

Earlier this month, the U.S. Treasury Department asked for updates from market participants about the possibility of selling ultra-long bonds. (Reporting by Richard Leong in New York Editing by Matthew Lewis)