Samsung Asset Management's Two US Major Index TR ETFs Surpass 2 Trillion KRW in Net Assets

Samsung Asset Management announced on the 23rd that the combined net assets of the 'KODEX US S&P500 TR ETF' and 'KODEX US Nasdaq100 TR ETF,' which invest in the US benchmark indices S&P500 and Nasdaq100, have surpassed 2 trillion KRW. The net assets of the dividend automatic reinvestment (Total Return·TR) ETFs, KODEX US S&P500 TR ETF and KODEX US Nasdaq100 TR ETF, recorded 1.21 trillion KRW and 820 billion KRW, respectively.

KODEX US S&P500 TR and KODEX US Nasdaq100 TR were listed in April 2021. After reaching a combined net asset of 1 trillion KRW at the end of June last year, they exceeded 2 trillion KRW in just 11 months. This year alone, the net assets of KODEX US S&P500 TR increased by 530 billion KRW, and KODEX US Nasdaq100 TR by 230 billion KRW.

The increase in net assets was mainly driven by inflows from individual investors. Since the beginning of this year, individual investors have net purchased 183.2 billion KRW of KODEX US S&P500 TR and 109.8 billion KRW of KODEX US Nasdaq100 TR, bringing nearly 300 billion KRW of new funds. Considering net purchases through retirement pension (DC/IRP) accounts, whose inflow amounts are not aggregated, it is estimated that most of the net asset growth is due to individual investors.

The active inflow of individual investors' funds into the two US benchmark index TR ETFs is analyzed to be because the TR products, which automatically reinvest dividends, have higher returns compared to other products tracking the same indices.

‘TR’ type products do not distribute dividends generated from the ETF’s portfolio to investors but automatically reinvest them into the index. When investors individually reinvest received dividends, trading fees and actual execution costs due to bid-ask spreads occur, so automatic reinvestment by the fund itself significantly helps increase returns.

In fact, since listing, KODEX US S&P500 TR and KODEX US Nasdaq100 TR have achieved returns of 63.4% and 67.5%, respectively. They have recorded higher performance compared to general dividend-paying products tracking the same indices.

Both products have a total expense ratio of 0.0099%, which is among the lowest for ETFs tracking similar indices. Samsung Asset Management lowered the total expense ratio in April to encourage individuals to start long-term investments using these KODEX US benchmark index TR ETFs in pension accounts, as these products are suitable for long-term installment investments.

Kim Dohyung, Head of ETF Consulting at Samsung Asset Management, said, "It is analyzed that the number of investors practicing long-term installment investments using these TR products in pension accounts, including DC/IRP retirement pension accounts, is increasing." He added, "When investing long-term through installment plans, investor preference for US benchmark index ETFs is the highest," and "The two KODEX US benchmark index TR ETFs will be good investment products for investors planning pension investments."