Korea Investment Trust Management announced on the 29th that the net asset value of the ACE US 30-Year Treasury Active (H) Exchange-Traded Fund (ETF) has surpassed 1 trillion KRW. Among ACE ETFs, the ACE US 30-Year Treasury Active (H) ETF is the first product to reach a net asset value of 1 trillion KRW.
According to the Korea Exchange, the net asset value of the ACE US 30-Year Treasury Active (H) ETF exceeded 1 trillion KRW on the 27th, reaching 1.0172 trillion KRW. As of the 28th, the net asset value stands at 1.0256 trillion KRW.
The ACE US 30-Year Treasury Active (H) ETF is the first domestic spot-type US long-term bond investment product and Korea Investment Trust Management’s first monthly dividend ETF. It includes US-issued 30-year Treasury bonds with a remaining maturity of 20 years or more.
The total expense ratio of the ACE US 30-Year Treasury Active (H) ETF is 0.05% per annum, the lowest among US long-term Treasury bond investment ETFs listed domestically. Compared to the US-listed US long-term Treasury bond investment ETF ‘iShares 20+ Year Treasury Bond ETF (TLT)’ which has an expense ratio of 0.15%, it is only about one-third.
The ACE US 30-Year Treasury Active (H) ETF’s net asset value surpassing 1 trillion KRW is thanks to the interest of individual investors. Individual investors have net purchased 490.6 billion KRW of the ACE US 30-Year Treasury Active (H) ETF since its listing until the day before. In the previous year, it ranked second in net purchases by individual investors among 812 ETF products, and this year it is also among the top net purchases by individual investors (6th place, 180.8 billion KRW).
The net purchases by individual investors reflect expectations of a base interest rate cut and demand for monthly dividend products. The ACE US 30-Year Treasury Active (H) ETF offers the advantage of enjoying capital gains on bonds equivalent to the market interest rate decline, considering the long duration (about 18 years) when the base interest rate is lowered in the future, and steady monthly distributions based on bond interest income while holding the product.
Korea Investment Trust Management recently expanded the ACE ETF lineup investing in US 30-year Treasury bonds to meet individual investor demand. On the 12th, they listed the monthly dividend product ‘ACE US 30-Year Treasury Yen Exposure Active (H) ETF,’ which benefits from both yen appreciation and base interest rate cuts, and the unhedged product ‘ACE US 30-Year Treasury Active ETF.’
Kim Seunghyun, head of ETF consulting at Korea Investment Trust Management, said, “Thanks to the strong support of investors, we were able to launch the first ACE ETF product to reach the 1 trillion KRW level. The current period ahead of the US base interest rate cut is an opportune time to invest in US long-term Treasury bonds, and we recommend steady investment through pension accounts and Individual Savings Accounts (ISA).”
He added, “Going forward, ACE ETFs will continue to strive to introduce products that investors need and prefer.”
All ACE ETFs are performance dividend-type products, and principal loss may occur depending on management results.
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