KODEX 24-12 Bank Bond Active, Fastest Ever to Surpass 2 Trillion KRW in Net Assets

On the 6th, Samsung Asset Management announced that the ‘KODEX 24-12 Bank Bonds (AA+ and above) Active’ Exchange-Traded Fund (ETF) surpassed 2 trillion KRW in net assets in just 55 trading days since its listing, marking the shortest period ever. This broke the previous record set by the KODEX CD Rate Active ETF, which exceeded 2 trillion KRW in 89 trading days after its listing in September, achieving this milestone three months earlier.

This is interpreted as a result of steady demand from both individual and institutional investors for high-interest bank bond ETFs with AAA credit ratings that offer an expected annual return of around 4%, amid the ongoing high-interest rate environment.

The maturity-matching bond ETF, KODEX 24-12 Bank Bonds (AA+ and above) Active ETF, has a maturity date of December next year. It diversifies investments across a total of eight banks, including three AAA-rated special bank bonds and five commercial bank bonds. Supported by the recent financial market sentiment, the yield to maturity (YTM) reached approximately 3.91% annually as of the previous day. Individual investors have also recorded net purchases of 10.6 billion KRW through continuous buying. Institutional investors, anticipating that the interest rate trend is more likely to stabilize or decline rather than rise, are reducing some investments in government bonds and increasing investments in bank bonds that offer higher returns. As of the previous day, the basic interest rate for one-year regular deposits at major commercial banks stood at around 3.0% annually.

Maturity-matching ETFs generally allow investors to achieve the expected level of profit if held until maturity, similar to fixed deposits or bonds. Therefore, they are suitable for investors seeking the most stable investment returns and those interested in bond investments amid high-interest rate conditions. Investors can easily check the expected yield from the current purchase date until maturity on the website and conveniently buy ETFs like stocks. Unlike fixed deposits, there is no disadvantage from early sale. Additionally, compared to bonds, trading is simpler. Individual investors can invest 100% not only through general accounts but also through retirement pension and pension savings accounts.

Im Taehyuk, Executive Director of the ETF Management Division at Samsung Asset Management, said, “Individual investors can participate on equal terms in the high-quality bank bond market, which is a major investment market for institutional investors, through the bank bond maturity-matching ETF,” adding, “This ETF product will establish itself as an essential option that can assist pension investors seeking safe asset investments.”