KB Asset Management's 'KBSTAR US Treasury 30-Year Yen Exposure ETF'... Individual Net Purchases Surpass 30 Billion Won

KB Asset Management's ‘KBSTAR US Treasury 30-Year JPY Exposure (Synthetic H) ETF’ product has gained sensational popularity among investors, surpassing 30 billion KRW in net individual purchases within just one month of its launch.

As of the 30th of last month, KB Asset Management announced on the 1st that the net individual purchase amount of the ‘KBSTAR US Treasury 30-Year JPY Exposure (Synthetic H) ETF’ has reached 31.3 billion KRW.

Launched on December 27 last year, this product is the first domestic exchange-traded fund (ETF) that simultaneously pursues capital gains from investing in 30-year US Treasury bonds and foreign exchange gains from fluctuations in the Japanese yen value.

It is known as the Korean version of Japan’s ‘iShares 20+ Year US Treasury Bond JPY Hedged ETF,’ which has received the most attention from domestic investors among overseas ETFs over the past three months.

By utilizing the ‘KBSTAR US Treasury 30-Year JPY Exposure (Synthetic H) ETF,’ domestic investors can invest in the same profit structure as the ‘2621JP ETF’ even through personal pension and retirement pension accounts.

Another advantage is that it can be invested in through existing stock accounts without the need for currency exchange procedures. To invest in Japan’s ‘2621JP ETF’ domestically, one must open a dedicated overseas stock account and pay KRW-JPY currency exchange fees every time they buy or sell, which is inconvenient.

The underlying index of the product is the ‘KIS US Treasury 30-Year JPY Exposure Index,’ which calculates the investment performance of US Treasury bonds with a remaining maturity of 20 years or more in Japanese yen. The yen-won exchange rate applies a currency open, allowing investment in long-term US government bonds in yen regardless of fluctuations in the dollar value.

Yook Dong-hwi, Head of ETF Marketing at KB Asset Management, said, “Historically, the greater the interest rate differential between the US and Japan, the weaker the yen is against the dollar, which implies the possibility of yen rebound when US interest rates fall.” He added, “Investors seem to prefer the ‘KBSTAR US Treasury 30-Year JPY Exposure (Synthetic H) ETF’ because it allows convenient investment in both US long-term bonds and the yen at once.”