Hanhwa Investment & Securities, 'ACE KRX Gold Spot' Commodity ETF Tops Individual Net Purchases

Korea Investment Trust Management announced on the 26th that ACE KRX Gold Spot ETF, the first domestic gold spot investment exchange-traded fund (ETF), ranked first in net purchases by individual investors among commodity ETFs since the beginning of the year.

According to the Korea Exchange on the 25th, individual investors net purchased 41.1 billion KRW of ACE KRX Gold Spot ETF this year. This figure far exceeds the average net purchase of domestic listed commodity ETFs, which is 1.7 billion KRW. Domestic individual investors net purchased ACE KRX Gold Spot ETF on 72 out of 79 trading days this year, maintaining strong interest in gold spot investment. Trading volume has also increased significantly. The average daily trading volume over the past month was 377,374 units, more than four times the December average of 93,990 units last year.

The rise in gold demand is attributed to global uncertainties such as the Iran-Israel war, US-China trade conflicts, and real estate market downturns. Supporting this, the Korea Exchange gold market recorded its highest daily average trading value since its opening in 2014 on the 21st.

Fueled by individual investors' interest, the ETF’s net asset value is also growing rapidly. The net asset value of ACE KRX Gold Spot ETF reached 206.2 billion KRW, doubling from 109.5 billion KRW at the end of last year, making it the largest commodity ETF in Korea.

This ETF also outperforms other ETFs of the same type in terms of returns. The recent 3-month, 6-month, and 1-year returns of ACE KRX Gold Spot ETF are 19.10%, 21.15%, and 20.55%, respectively, the highest among domestic gold-related ETFs.

ACE KRX Gold Spot ETF was the first gold spot ETF listed domestically by Korea Investment Trust Management in 2021. Its underlying index tracks the KRX Gold Spot Index calculated and published by the Korea Exchange. This index reflects the net return after deducting storage costs from the price return of 1kg gold spot traded on the KRX gold market. A key feature is that it does not incur rollover costs (costs associated with monthly contract replacements) unlike gold futures ETFs.

Korea Investment Trust Management was recognized for its contribution to being the first to list and operate a gold spot ETF domestically and received a plaque of appreciation from the Korea Exchange at the ‘10th Anniversary Seminar of the Korea Exchange Gold Market’ held in March.

Nam Yong-su, Head of ETF Management at Korea Investment Trust Management, said, “Due to the recent increase in global uncertainties, funds are flowing into ACE KRX Gold Spot ETF, the largest gold ETF in Korea. Additionally, as ACE KRX Gold Spot ETF is a currency-exposed product, investors can also benefit from dollar investment effects during strong dollar periods like now.”

He added, “ACE KRX Gold Spot ETF is the only domestic listed gold ETF that can be invested in through retirement pension accounts. By utilizing retirement pensions (DC·IRP), personal pensions, and ISA accounts, investors can invest in gold, a safe asset, over the long term while receiving tax benefits such as tax credits and tax deferrals.”