KB Asset Management (CEO Kim Young-sung) announced on the 20th that it will launch the ‘KBSTAR Gukgoche 10-Year Active ETF’ on the 21st of this month.
Together with the existing ‘KBSTAR Gukgoche 3-Year ETF’ and ‘KBSTAR Gukgoche 30-Year Enhanced ETF,’ this completes a lineup of three Gukgoche (government bond) exchange-traded funds (ETFs). Now, investors can invest in Gukgoche of various maturities through KB Asset Management’s ETF products alone.
The ‘KBSTAR Gukgoche 10-Year Active ETF’ is a product that tracks the price movement of highly liquid 10-year Gukgoche while pursuing excess returns through various active strategies.
The benchmark index, the ‘KAP Gukgoche 10-Year Index (Total Return),’ consists of the three most recently issued 10-year government bonds. The ‘KBSTAR Gukgoche 10-Year Active ETF’ seeks investment returns by increasing the weighting of the most recently issued bonds when interest rates decline.
The total expense ratio of this product is 0.012% per annum, which is the lowest among similar products in the industry. By investing in risk-free government bonds, it ensures stability, and once the current interest rate hike cycle ends, it can achieve higher capital gains compared to short-term bonds.
Generally, Gukgoche are traded in units of 10 billion KRW, but the ‘KBSTAR Gukgoche 10-Year Active ETF’ allows easy investment in government bonds at around 100,000 KRW per share. Additionally, as a physical ETF, it can be invested 100% through retirement pensions and pension savings accounts, making it suitable for pension products.
Kim Chan-young, Head of ETF Business Division at KB Asset Management, said, "The ‘KBSTAR Gukgoche 10-Year Active ETF’ offers a certain level of interest income plus capital gains from falling interest rates, making it advantageous for individual investors to use in pension accounts. Moreover, its low fees make it easy for institutional investors to invest as well."
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