Samsung Asset Management "KODEX US 30-Year Treasury +12% Premium, Net Assets Surpass 200 Billion Won"

Samsung Asset Management announced on the 31st that the KODEX US 30-Year Treasury +12% Premium (Synthetic H) Exchange-Traded Fund (ETF) has surpassed 200 billion KRW in net assets within just three months of its listing. As of the closing price on the 30th, it recorded net assets of 231.4 billion KRW. The cumulative net purchase amount by individual investors also reached 114.6 billion KRW.

The KODEX US 30-Year Treasury +12% Premium invests in US 30-year Treasury bonds with more than 20 years remaining until maturity. It also aims to secure an annual premium of around 12% by selling weekly call options at a certain level each week, while reinvesting the interest (coupons) generated from the invested assets back into the fund, thereby relatively increasing market participation. The total expense ratio is also among the lowest at 0.25% per year compared to similar covered call strategy products investing in US Treasuries.

Thanks to this distinctive structure and low fees, this product has continuously provided monthly dividends at about 1% since its listing, while achieving a high market participation rate with a 3-month return of 5.34%.

With recent assessments that a US base rate cut is within sight and expectations that interest rates will decline over a long period, individual and institutional investors are increasing purchases of the KODEX US 30-Year Treasury +12% Premium, which pays monthly dividends targeting 12% annually by utilizing option premiums. It is believed that investors are actively leveraging the fact that if the bond market shows a prolonged downward stabilization trend, monthly dividend products that secure market participation and use a limited covered call strategy to significantly increase dividend yields can outperform general products.

In fact, this product is highly popular not only among aggressive investors expecting bond investment returns by capitalizing on interest rate cuts through US long-term Treasury investments, but also among pension-type investors seeking stable cash flow, as it offers capital gains potential in addition to monthly dividends of about 1%. Samsung Asset Management estimates that approximately 23 billion KRW of retirement pension funds have flowed in, in addition to the 114.6 billion KRW net purchases by individuals.

Additionally, this product is currency-hedged, reducing concerns about foreign exchange losses caused by a simultaneous decline in the dollar value that may occur with US interest rate cuts, thus designed to allow investors to maximize capital gains from US rate cuts.

Seobo Kyung, a manager at Samsung Asset Management, said, “Investors are directly experiencing the high monthly dividend rate and market participation of the KODEX US 30-Year Treasury +12% Premium (Synthetic H), leading to a rapid inflow of investment funds in a short period.” He added, “If you anticipate a long-term interest rate decline, this product will be helpful not only for long-term investors planning for retirement but also for aggressive investors looking to use rate cuts as an investment opportunity.”