Mirae Asset Management Launches New Listing of ‘TIGER 27-04 Corporate Bond Active’

Mirae Asset Global Investments announced on the 23rd that it will newly list the ‘TIGER 27-04 Corporate Bonds (A+ and above) Active Exchange-Traded Fund (ETF)’ on the Korea Exchange.

The ‘TIGER 27-04 Corporate Bonds (A+ and above) Active ETF’ is a maturity-matching bond ETF that invests in corporate bonds and other financial bonds rated A+ or higher, maturing in April 2027. Maturity-matching bond ETFs are popular among investors seeking stable fund management because holding them until maturity allows realization of the expected principal and interest income. As of the 22nd, the expected yield to maturity (YTM) of the ‘TIGER 27-04 Corporate Bonds (A+ and above) Active ETF’ is approximately 3.92% annualized.

Amid expectations of interest rate cuts this year, the ‘TIGER 27-04 Corporate Bonds (A+ and above) Active ETF’ invests in bonds with a 3-year maturity, which is efficient during a period of falling interest rates. If interest rates decline in the future, investing in bonds with longer durations may be more advantageous than short-term bonds. Short-term bonds carry the risk of lower yields at reinvestment if interest rates have fallen by maturity, but the ‘TIGER 27-04 Corporate Bonds (A+ and above) Active ETF’ reduces this yield decline risk by investing in 3-year maturity bonds.

Additionally, maturity-matching bond ETFs can be traded anytime before maturity, allowing investors to pursue additional returns through further purchases or early sales depending on interest rate fluctuations. If interest rates rise compared to the listing time, additional purchases can increase the yield to maturity, and if interest rates fall, selling before maturity can seek capital gains. Unlike deposits, ETFs have the advantage that the agreed interest rate does not decrease even if sold early.

Investing in the ‘TIGER 27-04 Corporate Bonds (A+ and above) Active ETF’ through pension accounts also offers various tax benefits. When traded through ISA (Intermediary type), personal pension, or retirement pension (DC/IRP) accounts, taxation is deferred until withdrawal, and tax credits can be received. It is possible to invest 100% in this bond-type ETF through retirement pension accounts. Moreover, unlike individual bond investments that mainly require buying and selling through securities firms, this ETF can be easily bought and sold like stocks.

Mirae Asset Global Investments is conducting a listing commemorative event for customers trading the newly launched ETF. Customers who meet the daily trading conditions for the ‘TIGER 27-04 Corporate Bonds (A+ and above) Active ETF’ at Daishin Securities will be entered into a draw to receive cultural gift certificates. Detailed event information can be found on the securities firm's website.

Namho Kim, Head of the FICC ETF Management Division at Mirae Asset Global Investments, said, “Maturity-matching bond ETFs are gaining popularity as investment products that can stably benefit from high-level bond interest rates. In anticipation of a full-scale interest rate cut, the ‘TIGER 27-04 Corporate Bonds (A+ and above) Active ETF’ allows easy and convenient bond investment, offering stable interest income along with active capital gains.”