Samsung Asset Management, KODEX CD Interest Rate ETF... "Individuals Bought 500 Billion Won in 4 Months"

Samsung Asset Management announced on the 2nd that the cumulative net purchases by individuals of the two KODEX CD Interest Rate ETFs this year have exceeded 500 billion KRW.

KODEX CD Interest Rate Active, which was listed in June last year, recorded the highest net purchases by individuals among all exchange-traded funds (ETFs) within just four months this year, with net inflows of 489.5 billion KRW. The total cumulative net purchases by individuals reached 773.3 billion KRW in about 10 months, ranking 7th among all ETFs. KODEX CD Interest Rate Active also holds the largest total net asset size among all ETFs, amounting to 8.5 trillion KRW.

KODEX 1-Year Bank Negotiable Certificate of Deposit (CD)+Active, which was listed on the 23rd of last month, has also seen continuous net purchases by individuals, reaching 14.4 billion KRW within just six trading days.

The concentration of individual funds in KODEX CD Interest Rate ETFs is attributed to higher returns, lower transaction costs, and trading convenience compared to traditional parking-type products.

KODEX CD Interest Rate ETFs calculate the daily interest rate level of CD 91-day and CD 1-year instruments on a pro-rata basis and reflect it daily with compound interest. Therefore, investors can earn the daily interest rate level of the CD even if they invest for just one day without any period conditions. Additionally, KODEX 1-Year Bank Negotiable Certificate of Deposit+Active provides an extra daily return of 0.5% on weekdays if the KOSPI 200 index rises by more than 1% in a day, and on the day before holidays, it pays additional returns including the number of holiday days.

In fact, since its listing in June last year, KODEX CD Interest Rate Active has provided an average daily price gain of about 152 KRW per share over 221 trading days without any loss days. Similarly, KODEX 1-Year Bank Negotiable Certificate of Deposit+Active has also provided the highest average daily price gain of about 167 KRW among 11 interest rate-linked ETFs without any loss days.

Moreover, investors can trade these products anytime during the day with a practical transaction cost of about 5 KRW without worrying about price fluctuations. Although the price per share of KODEX CD Interest Rate ETFs is around 1 million KRW, the bid unit is set at 5 KRW, the same as other ETFs. Liquidity Providers (LPs) offer tight bid prices, minimizing the impact of actual buy and sell prices on investors’ returns.

Samsung Asset Management expects that individual investors’ demand for KODEX CD Interest Rate ETFs will rapidly increase, supported by the possibility of a delay in the start of U.S. interest rate cuts, increased volatility in domestic and international stock markets, and the rapid growth of pension withdrawal retirees in the future.

These products can be invested in not only through general accounts and pension savings accounts but also 100% through DC/IRP retirement pension accounts, making them essential items for smart pensioners planning to withdraw pensions after the age of 55.

Im Taehyuk, Head of ETF Management at Samsung Asset Management, said, “Since investors are well aware of the advantages and uses of parking-type ETFs, we expect steady inflows of funds from smart investors, including general stock investors as well as pension account holders, to meet diverse investment demands.”