Listing of Two KODEX 10-Year/30-Year Treasury Bond Maturity ETFs

Maturity 10-Year and 30-Year Long-Term Bond Maturity-Matching ETFs Investing in Risk-Free Grade Government Bonds

Good news for pension savings investors. In the era of high interest rates, ETFs with the longest 30-year fixed deposit style have been launched. If held until maturity, pre-tax returns exceeding 1.5 times the investment amount are expected.

Samsung Asset Management announced on the 31st that it will newly list two maturity-matching bond ETFs: ‘KODEX 33-06 Treasury Bond Active ETF’ and ‘KODEX 53-09 Treasury Bond Active ETF’.

‘KODEX 33-06 Treasury Bond Active’ and ‘KODEX 53-06 Treasury Bond Active’ are ETFs with maturities like regular bonds, investing in treasury bonds maturing around June 2033 and June 2053, respectively. As of the 30th, the yield to maturity (YTM) is 3.61% per annum and 3.65% per annum, respectively. Since they are operated in a TR (Total Return) method that reinvests without paying dividends, the expected pre-tax returns at maturity reach a total of 40.52% and 180.68%, respectively.

The reason such high returns are expected is due to the current high interest rate environment, which is the highest level in the past 10 years. Many experts predict that the high-interest bond market is likely to enter a downward stabilization trend starting this year. In other words, this is interpreted as the right time to invest in long-term high-interest products. Investing in bonds now allows investors to receive high interest income until maturity, and if interest rates fall, they can sell before maturity to gain capital gains. Especially, the longer the maturity, the higher the interest rate can be received for a longer period, and more capital gains from selling due to interest rate declines can be collected, so more people are trying to invest in long-term bonds as much as possible.

Additionally, since this ETF invests in the most stable treasury bonds for a long period of 10 or 30 years without amount restrictions, it is also suitable as a gift investment product to pass on to young children. Maturity-matching bond ETFs have the special advantage of being 100% investable not only in retirement pension DC/IRP accounts but also in pension savings accounts. By opening a pension account in the child’s name and investing, one can enjoy stable returns as well as various benefits such as tax deferral and low-rate taxation.

Im Taehyuk, Head of ETF Management at Samsung Asset Management, said, “The two KODEX 33-06 and 53-06 Treasury Bond Active ETFs listed today are products like TDFs in the bond sector that allow long-term investment in the safest risk-free grade treasury bonds with maturities of 10 or 30 years,” adding, “In particular, the 30-year maturity product is the one that maximizes the benefits of compound interest the most among the ETF lineup currently listed in Korea.”

Meanwhile, Samsung Asset Management grew the maturity-matching bond ETFs it first introduced last year, ‘KODEX 23-12 Bank Bond Active’ and ‘KODEX 23-12 Treasury Bond Active’, to a total scale of 1.7 trillion KRW within six months of listing.