Samsung Asset Management's KODEX Bank Bond Active ETF Surpasses 1 Trillion KRW in Net Assets

Samsung Asset Management's ‘KODEX 23-12 Bank Bond (AA+) Active Exchange-Traded Fund (ETF)’ surpassed 1 trillion KRW in net assets within three months of its listing. It set a record as the first and largest maturity-matching bond ETF in the industry.

On the 27th, Samsung Asset Management announced that the net assets of the ‘KODEX 23-12 Bank Bond (AA+) Active ETF’ reached 1.0694 trillion KRW. This ETF matures in December 2023 and invests in AAA-rated special bank bonds and commercial bank bonds, operating as a maturity-matching ETF. The ETF’s yield to maturity (YTM) as of the 24th of this month is 3.67% per annum.

A representative from Samsung Asset Management stated, “The rapid growth of this ETF to a scale of 1 trillion KRW in a short period is due to the high credit quality and abundant liquidity of bank bonds,” adding, “The shift of investor interest to short-term bond products with maturities amid a market environment anticipating interest rate hikes also played a role.”

Maturity-matching ETFs allow investors to earn returns at the expected yield level from the purchase date if held until maturity, similar to fixed deposits. Unlike fixed deposits, they have the advantages of no penalties for early redemption and no restrictions on investment amounts.

According to Samsung Asset Management, a total of 10 maturity-matching ETFs are currently listed. As of the third month since listing, they have rapidly grown to approximately 2.6 trillion KRW in scale, with the KODEX 23-12 Bank Bond Active ETF accounting for over 40% of this at 1.0694 trillion KRW.

Im Taehyuk, Executive Director of the ETF Management Division at Samsung Asset Management, said, “The relatively higher yield to maturity of the KODEX Bank Bond ETF compared to fixed deposit interest rates, which are currently in the low 3% range, has positively influenced the increase in net assets.”