KB Securities Launches New S&P500 Tracking Leveraged and Inverse ETNs

[Asia Economy Reporter Minwoo Lee] KB Securities is launching new exchange-traded note (ETN) derivatives related to the S&P 500 index.

On the 21st, KB Securities announced that it will newly list 'KB Leverage S&P 500 Futures ETN(H)' and 'KB Inverse 2X S&P 500 Futures ETN' on the 22nd.

These products are based on indices designed to track twice and negative (-) twice the daily returns of the 'E-mini S&P 500 Futures (CME E-mini S&P 500 Future)' listed on the Chicago Mercantile Exchange (CME) in the United States.

'KB Leverage S&P 500 Futures ETN(H)' is a currency-hedged (risk-averse) product linked only to the index returns. The 'KB Inverse 2X S&P 500 Futures ETN' is a currency-exposed product, which may incur additional gains or losses depending on fluctuations in the KRW-USD exchange rate, separate from the index returns.

The total fees are ▲ 0.49% per annum for 'KB Leverage S&P 500 Futures ETN(H)' and ▲ 0.59% per annum for 'KB Inverse 2X S&P 500 Futures ETN', which are prorated daily and reflected in the final indicative value (IV). A KB Securities official explained, "By lowering management and hedging costs within the total expenses, these are the lowest in the industry among S&P 500-related derivative products."

Trading will be available until April 20, 2026, after listing. The issuance volume is 10 million shares each, and rollover (futures replacement) will be conducted based on the closing price five business days before futures expiration each quarter.

Meanwhile, individual investors who are not professional investors must complete prior education from the Korea Financial Investment Association and meet minimum deposit requirements to invest in leveraged exchange-traded funds (ETFs) and ETNs for the first time. KB Securities requires a minimum deposit of 10 million KRW for new and general accounts, and 5 million KRW for Royal Star, Gold Star, and Premium Star grade accounts.

These products may result in principal loss depending on investment outcomes. Regardless of the performance of the underlying index, there is issuer default credit risk. Detailed product explanations can be found in the prospectus on the KB Securities website or through their branches.

Kim Hoyoung, Head of Equity Division at KB Securities, said, "These two newly listed ETNs can be utilized in both rising and falling markets, and their total fees are among the lowest in the industry, which is a key advantage." He added, "We plan to continue launching overseas stock-related products tailored to customers' investment needs."