Samsung Asset Lowers Fees on Four KODEX US Benchmark Index ETFs to the Lowest Level

Samsung Asset Management announced on the 19th that it will reduce the total expense ratio of four KODEX U.S. benchmark index ETFs from an annual 0.05% to a domestic lowest level of 0.0099%, effective from the 19th. This means that for an investment of 100 million KRW, the fee burden is less than 10,000 KRW.

The products with reduced fees include two currency-open, dividend-automatically reinvested Total Return (TR) types: △KODEX U.S. S&P 500 TR △KODEX U.S. Nasdaq 100 TR, and two currency-hedged types that pay dividends: △KODEX U.S. S&P 500 (H) △KODEX U.S. Nasdaq 100 (H), totaling four products.

The S&P 500 and Nasdaq 100 indices are asset classes favored by both institutional and individual investors, and have become essential products for pension investments among domestic individual investors. Through this fee reduction, investors will directly benefit from improved returns.

Samsung Asset Management plans to actively encourage long-term installment investments within pension accounts by individual investors through this lowest-level fee reduction. The effect of fee reduction is more significant in long-term investments. Applying the lowest fees to the TR type (Total Return), which automatically reinvests dividends and has superior long-term performance compared to the PR type (Price Return) that pays dividends, also reflects the intention to enhance long-term returns for individual investors.

In April 2021, Samsung Asset Management became the first in Korea to list U.S. benchmark index Total Return (TR) ETFs. These have received great response from pension investors who want to invest long-term in the U.S. stock market with a higher stock ratio. Thanks to this popularity, the KODEX U.S. S&P 500 TR recently surpassed 1 trillion KRW in assets under management. The KODEX U.S. Nasdaq 100 TR also has assets under management reaching 730 billion KRW.

The U.S. benchmark index TR ETFs have shown the best performance within the same index tracking category, along with the convenience of automatic reinvestment. The KODEX U.S. S&P 500 TR and KODEX U.S. Nasdaq 100 TR ETFs recorded the highest returns over various periods such as 6 months, 1 year, and since inception. As of this date, since their inception in April 2021, the KODEX S&P 500 TR and KODEX Nasdaq 100 TR achieved returns of 56.43% and 59.84%, respectively, outperforming general PR type ETFs (assuming dividend reinvestment) by up to 1.9 percentage points and 0.6 percentage points. Considering that investors find it difficult to reinvest dividends in real time, the return gap is expected to be even larger, and this fee reduction is anticipated to further widen this performance difference.

Based on this, Samsung Asset Management plans to encourage individual investors to build successful asset accumulation experiences through long-term installment investments in KODEX U.S. S&P 500 TR and KODEX U.S. Nasdaq 100 TR, enabling them to construct diverse investment portfolios using ETFs in the future. To this end, various activities will be carried out, including installment investment events and investment seminars in collaboration with distributors, as well as producing and providing investment guides and video content that share appropriate investment methods tailored to circumstances, targeting pension individual investors.

Jiwon Ha, Vice President and Head of ETF Business Division at Samsung Asset Management, said, “As a leading ETF asset manager, Samsung Asset Management has decided to reduce fees on four U.S. benchmark index ETFs that can provide the greatest practical benefits to expand an efficient long-term installment investment culture among domestic investors. We will further strive to develop pension-specialized products and services so that investors can continuously build successful investment experiences using pension assets through Samsung Asset Management KODEX ETFs, and shift their current pension portfolios, which are centered on principal-guaranteed products, to investment-type products.”