Shinhan Investment Corp. announced on the 17th that it will offer the 'Korea Investment U.S. Long-Term Treasury Bond Fund,' which primarily invests in U.S. Treasury bonds and related ETFs listed in the U.S.
The Korea Investment U.S. Long-Term Treasury Bond Fund allocates approximately 30% to U.S. long-term Treasury bond spot holdings with a duration (weighted average maturity) of over 15 years, and about 70% to U.S.-listed long-term Treasury bond ETFs. Some remaining liquidity is managed through dollar money market funds (MMFs) to pursue stable interest income.
A distinguishing feature of this fund compared to other overseas bond funds of the same type is its shorter redemption cycle. While most overseas bond funds have a redemption period of 8 to 9 business days, this fund allows investors to receive redemption proceeds within 6 business days from the redemption request date.
Recently, as U.S. economic indicators have shown a slowdown in inflation and expectations for a rate cut have come into view, investor interest in this fund product has increased. Long-term Treasury bond prices have an inverse relationship with benchmark interest rates; when the U.S. lowers its benchmark rate, bond prices rise, leading to higher yields.
Lee Kwang-ryeol, Head of Fund Products, stated, "Until the rate cut, investors can earn bond interest income, and during the rate cut phase, they can secure both interest income and capital gains. Because the duration is long, the fund is sensitive to interest rate changes and has high volatility, so we recommend appropriate asset allocation with safe assets."
This fund is available for subscription at Shinhan Investment Corp.'s nationwide branches. However, investors should note that all financial products carry the risk of principal loss depending on management results.
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