KODEX CD Interest Rate Active "Individuals Buy 500 Billion Won... 200 Billion Won Inflow This Year"

Samsung Asset Management announced on the 20th that the cumulative net purchase by individuals of the KODEX CD Interest Rate Active (Synthetic) Exchange-Traded Fund (ETF) has exceeded 500 billion KRW, reaching 526.6 billion KRW. This is the largest among interest rate and bond ETFs and ranks 10th among all ETFs.

Since its listing in June last year, KODEX CD Interest Rate Active has attracted about 242.8 billion KRW of net purchases by individuals this year alone, ranking first among all ETFs. Individual investors' interest continues to rise, with 17 days this year seeing net purchases exceeding 10 billion KRW by individuals. The largest daily net purchase by individuals since listing was 32.9 billion KRW, recorded on the 28th of last month. Currently, with net assets of 7.5 trillion KRW, it is the largest ETF by size.

The reason why individual funds are concentrated in the KODEX CD Interest Rate Active ETF is due to higher returns, lower transaction costs, and trading convenience compared to traditional bank parking products.

KODEX CD Interest Rate Active calculates the daily interest rate level of the 91-day CD on a pro-rata basis and reflects it daily with compound interest, so investors can earn the daily interest rate level of the 91-day CD even if they invest for just one day without any period conditions. In fact, since its listing in June last year, it has provided an average daily profit of about 154 KRW per share without any loss days.

Like the U.S., Korea continues to experience an inverted yield curve where short-term bonds have higher interest rates than some long-term bonds. The 91-day CD interest rate is 3.64% per annum, higher than the 1-year rate of 3.63%, making KODEX CD Interest Rate Active increasingly recognized by investors as a high-interest “parking” product.

Additionally, investors can buy or sell this product at any time during the day with no price concerns, trading it with an actual transaction cost of about 5 KRW. KODEX CD Interest Rate Active has the highest price per share at 1,030,145 KRW but applies the same 5 KRW bid unit as other ETFs. Moreover, liquidity providers (LPs) offer abundant buy and sell quotes worth hundreds of billions of KRW.

Yoo Ah-ran, a manager at Samsung Asset Management, said, “Since KODEX CD Interest Rate Active tracks the 91-day CD benefiting from the inverted yield curve, it offers slightly better returns for parking investors. As individual investors have become familiar with the advantages and uses of parking ETFs, having recorded cumulative net purchases of 500 billion KRW, we expect steady inflows of funds from smart investors, including general stock investors and pension account holders, to meet diverse investment demands.”