Samsung Asset Management's KODEX 1-Year Bank Negotiable Certificate of Deposit + Active... Net Assets Surpass 1 Trillion Won

Samsung Asset Management announced on the 5th that the ‘KODEX 1-Year Bank Negotiable Certificate of Deposit (NCD) + Active Exchange-Traded Fund (ETF)’ has surpassed 1 trillion KRW in net assets. This milestone was reached about 70 days after its launch in April.

The KODEX 1-Year Bank NCD + Active ETF is managed with the goal of reflecting daily compounded returns based on the one-day interest rate of the 1-year bank negotiable certificate of deposit (CD). Additionally, if the KOSPI 200 index rises by more than 1% in a day, an extra daily return of 0.5% per annum is paid. Moreover, if the KOSPI 200 index increases by more than 1% on the day before a holiday, the returns for the subsequent holiday period are also additionally reflected. In fact, since its listing, the KODEX 1-Year Bank NCD + Active ETF has provided additional returns on a total of 15 days, including holidays, out of the approximately 70 days.

Due to these additional return conditions, the KODEX 1-Year Bank NCD + Active ETF has shown an annualized return of 3.70% since its listing, recording the highest performance among interest rate-linked parking ETFs that track CD rates and KOFR rates as underlying assets. Accordingly, the KODEX 1-Year Bank NCD + Active ETF is regarded as an innovative product that breaks the mold of existing interest rate-linked ETFs, whose returns are determined solely by specific benchmark interest rates.

Individual investors have also shown strong interest in this product. Since its listing in April, the cumulative net purchase amount by individuals has reached 51 billion KRW. This is the second-largest scale among interest rate-linked parking ETFs during the same period, following the KODEX CD Rate Active ETF, which has 189.6 billion KRW.

The high interest from individual investors in the KODEX 1-Year Bank NCD + Active ETF is not only due to its high returns but also because the product was listed at 1 million KRW per share, minimizing actual trading costs for investors. By offering tightly spaced bid and ask LP quotes aligned with a 5 KRW price unit, the actual buying and selling costs are reduced, minimizing the impact on investors’ returns.

Im Tae-hyuk, Head of ETF Management at Samsung Asset Management, said, “The KODEX 1-Year Bank NCD + Active ETF is a new type of product that adds stock price-linked additional return conditions to the characteristics of existing interest rate-linked parking ETFs. Since it can generate higher returns without penalties depending on the KOSPI 200 index, it shows higher returns compared to other interest rate-linked ETFs.” He added, “This product is suitable for short-term investment purposes such as investment standby or withdrawal preparation in both general and pension accounts for institutional as well as individual investors. Therefore, it is expected to grow alongside the expansion of the pension market in the future.”