Shinhan Asset Management's SOL Ultra-Short-Term Bond Active ETF Surpasses 100 Billion KRW

Shinhan Asset Management announced on the 15th that the net assets of the SOL Ultra-Short-Term Bond Active ETF, which was listed last November, have surpassed 100 billion KRW.

Kim Jeong-hyun, Head of the ETF Business Division at Shinhan Asset Management, stated, “Since the beginning of the year, except for some themes like on-device AI, the KOSPI index has fallen by 4.33%, increasing market volatility. During such times, it is necessary to increase cash holdings and observe the market. The SOL Ultra-Short-Term Bond Active ETF is superior in performance compared to short-term financial products in the market, making it an optimized product for parking surplus funds.”

The ‘SOL Ultra-Short-Term Bond Active ETF’ is managed stably by constructing a portfolio mainly composed of high-quality short-term financial products such as ultra-short-term bonds with a remaining maturity of less than 3 months (credit rating A- or higher) and commercial paper (A2- rating or higher), thereby reducing volatility caused by interest rate fluctuations. It seeks excess returns through additional interest income secured by discovering undervalued high-quality stocks and selling repurchase agreements (RPs).

Through such active management, a portfolio yield of 4.57% per annum is expected, which is relatively superior compared to CD91 rate (3.85%), KOFR rate (3.59%), new-type MMF (4.01%), and fixed deposits (2.9%).

Kim said, “Since the base interest rate was once again unanimously held steady and the timing of a rate cut remains unclear, many experts expect the high interest rate environment to continue for the time being. In situations of increased uncertainty in the domestic and international economy and rising stock market volatility, stable management of standby funds and short-term liquidity funds is important. It is necessary to actively utilize parking-type ETFs that offer expected returns superior to market interest rates.”

Meanwhile, unlike most parking-type ETFs that track KOFR (risk-free benchmark rate) or CD (certificates of deposit) rates and are classified as risky assets, the SOL Ultra-Short-Term Bond Active ETF is classified as a safe asset, allowing 100% investment of accumulated funds in retirement pension (DC/IRP) accounts.