Samsung Asset Management's KODEX US 30-Year Treasury Active ETF Surpasses 200 Billion KRW in Net Assets

Samsung Asset Management announced on the 16th that the U.S. long-term Treasury bond exchange-traded fund (ETF), ‘KODEX US 30-Year Treasury Active (H) ETF,’ surpassed 200 billion KRW in net assets within just 20 trading days after its listing. Individual investors have continued net buying every single day without fail.

KODEX US 30-Year Treasury Active (H) is the Korean version of the ‘TLT’ ETF, which is favored by domestic investors. It hedges against exchange rate volatility and also pays monthly dividends. Additionally, it is designed with a fund-of-funds structure to minimize the actual costs involved in investing. It holds less than 30% of U.S. 30-year Treasury bonds directly, with the remainder invested in pure U.S. 30-year Treasury ETFs listed in the U.S., creating a very simple structure that improves the high-cost structure of existing similar products. In fact, the total expense ratio is 0.015% per year, the lowest among similar products, and the total expense and cost based on the current portfolio is also about 0.05%, which is at the lowest level.

Investors have responded positively to this efficient structure. KODEX US 30-Year Treasury Active (H) surpassed 200 billion KRW in net assets within 20 trading days of listing. During the same period, individuals have net bought every day without exception. The cumulative net buying amount by individuals reached 22.2 billion KRW, and when adding the unreported retirement pension purchases, the scale is estimated to exceed approximately 30 billion KRW.

In particular, institutional investors who had previously invested in U.S. long-term bonds and TLT (iShares 20+ Year Treasury Bond ETF) showed strong demand. Since KODEX US 30-Year Treasury Active (H) is a spot-type currency-hedged product, it has the lowest actual cost and exhibits performance movements most similar to the U.S. 30-year Treasury and TLT. Moreover, it offers the advantage of omitting the currency hedging process required when investing directly in U.S. assets.

Recently, major U.S. economic indicators such as the Consumer Price Index have shown a stable trend, and as of the 15th, the futures market reflects the possibility of an interest rate cut starting with about a 25 basis point cut at the September Federal Open Market Committee (FOMC) meeting, followed by approximately 75 basis points cumulatively over three times by December this year. Accordingly, investor funds continue to flow into representative long-term bond products such as the U.S. 30-year Treasury ETF, especially monthly dividend ETFs that can partially offset volatility factors like the U.S. presidential election. KODEX US 30-Year Treasury Active (H) is expected to pay monthly dividends in the 4% range annually, reflecting the current U.S. 30-year Treasury yield level.

Im Tae-hyuk, Executive Director of ETF Management at Samsung Asset Management, stated, “The KODEX US 30-Year Treasury Active (H) ETF is an investment tool that both institutional and individual investors can use effectively, as it builds a cost-efficient portfolio while precisely tracking the performance of the U.S. 30-year Treasury bond.”