KB Asset Management Launches ‘KBSTAR KOFR Interest Rate Reactive ETF’

KB Asset Management announced on the 29th that it will launch the ‘KBSTAR KOFR Interest Rate Active (Synthetic) ETF’ on the 30th. With this, KB Asset Management completes its representative lineup of three parking-type ETFs, including the existing ‘KBSTAR Money Market Active’ and ‘KBSTAR CD Interest Rate Active ETF’ along with the new ‘KBSTAR KOFR Interest Rate Active ETF.’

The KOFR interest rate is a risk-free benchmark rate created in South Korea. It is mainly used in ultra-short-term transactions secured by government bonds and Monetary Stabilization Bonds, and is highly reliable as it is calculated based on actual transactions.

The ‘KBSTAR KOFR Interest Rate Active ETF’ is a product that tracks the performance of the KOFR interest rate and accumulates interest daily. It is stable with very low risk of loss due to interest rate fluctuations.

By using this product, individual investors can indirectly participate in the KOFR interest rate market, which has generally been accessible only to institutions. It allows easy setup and redemption without concerns about investment limits or maturity, and investors can earn interest income even with just one day of investment.

Additionally, since interest income is confirmed and accumulated on each business day, investors can compound ultra-short-term daily interest rates, and the price rises regardless of market interest rate volatility (except when the KOFR interest rate turns negative).

Kim Chan-young, Head of the ETF Business Division at KB Asset Management, said, “In a situation where stock market uncertainty and market volatility are increasing, the ‘KBSTAR KOFR Interest Rate Active ETF’ will serve as a useful investment option for investors who want to increase the proportion of cash assets.”