Meritz Securities Launches Six Products Including Korea's First '3x US Treasury Leverage ETN'

10-Year and 30-Year 3x Leverage Investment Available

Meritz Securities Headquarters Building. Photo by Meritz Securities

Meritz Securities, which holds the largest lineup of Exchange Traded Notes (ETNs) in Korea, announced on the 24th that it will launch the first ETN in Korea to invest with 3x leverage in the yield of long-term U.S. Treasury bonds.

Meritz Securities plans to list a total of six ETN products on the Korea Exchange on the 25th, including ETNs that allow 3x leveraged investment in the 10-year and 30-year U.S. Treasury bonds.

The newly listed products include those tracking the 10-year U.S. Treasury bond: △Meritz U.S. Treasury 10-Year ETN △Meritz 3X Leverage U.S. Treasury 10-Year ETN △Meritz Inverse 3X U.S. Treasury 10-Year ETN, and those tracking the 30-year U.S. Treasury bond: △Meritz U.S. Treasury 30-Year ETN △Meritz 3X Leverage U.S. Treasury 30-Year ETN △Meritz Inverse 3X U.S. Treasury 30-Year ETN.

The underlying indices for these products are calculated by KIS Asset Evaluation. They are designed to automatically reinvest dividends by tracking the Total Return (TR) index. Notably, unlike the previously listed Meritz Leverage U.S. Treasury ETN (H) series which were currency-hedged products, these new products are exposed to fluctuations in the U.S. dollar exchange rate, allowing for a variety of investment strategies.

The total expense ratio is 0.2% for Meritz U.S. Treasury 10-Year ETN and Meritz U.S. Treasury 30-Year ETN, and 0.5% for the other four products. This is less than half of the 1.04% total expense ratio of TMF (Direxion Daily 20+ Treasury Bull 3X Shares), a 3x leveraged ETF tracking long-term U.S. Treasury yields currently traded in the U.S. market. Another advantage is the simultaneous listing of inverse products that allow for reverse investment, providing protection against rising interest rate risks.

As a result, the total number of ETNs listed by Meritz Securities has increased to 75, making it the securities firm with the most diverse product offerings in the industry.

Kwon Dong-chan, Head of Trading at Meritz Securities, said, "Now domestic investors no longer need to stay up all night or pay separate currency exchange fees to invest in 3x leveraged ETFs listed in the U.S. Since ETNs track the underlying index directly, unlike ETFs, considering total expenses and hidden costs, the launch of these products will reduce the cost burden for domestic investors."

Meanwhile, Meritz Securities is also holding an event where investors who trade or hold a certain quantity of the U.S. Treasury 3X series products will be entered into a draw to receive the ‘Meritz 3X Leverage U.S. Treasury 30-Year ETN’. Details can be found on the Meritz Securities website or the dedicated ETN website.