ACE US 30-Year Treasury Active ETF Net Assets Surpass 1.5 Trillion Won

Korea Investment Trust Management announced on the 7th that the net asset value of the ACE US 30-Year Treasury Active (H) Exchange-Traded Fund (ETF), which invests in long-term US government bonds, has surpassed 1.5 trillion KRW.

According to the Korea Exchange, the net asset value of the ACE US 30-Year Treasury Active (H) ETF reached 1.5013 trillion KRW as of the 2nd. Based on the previous day's closing price, the net asset value of the ETF is 1.5396 trillion KRW. It is currently the largest among ETFs investing in long-term US bonds listed domestically.

The ACE US 30-Year Treasury Active (H) ETF grew its size by more than 50% in about four months since surpassing 1 trillion KRW in net assets at the end of March. In July alone, the net asset value increased by 156.6 billion KRW. This is the largest increase when aggregating net asset changes of US long-term bond ETFs during the same period. The rapid growth of this ETF is attributed to the inflow of funds as the possibility of a US interest rate cut came into view. The Federal Reserve recently hinted at a potential rate cut in September at the Federal Open Market Committee (FOMC) meeting.

Funds flowed in from pension accounts and banks. According to Koscom ETF Check, since the beginning of the year, 891.7 billion KRW has flowed into the ACE US 30-Year Treasury Active (H) ETF through individual pension and retirement pension accounts. Individual investors net purchased 301.1 billion KRW during the same period. Banks also showed strong interest in this ETF. Since the start of the year, banks’ net purchase amount was 243.4 billion KRW, ranking first among 146 bond-type ETFs listed domestically.

The ACE US 30-Year Treasury Active (H) ETF is also the most actively traded among domestically listed bond ETFs. Its average daily trading volume this year is 1.83 million units, significantly exceeding the average daily trading volume of all bond ETFs, which is 70,000 units.

The ACE US 30-Year Treasury Active (H) ETF is the first domestic physically-backed US long-term bond investment ETF. Its benchmark index is the Bloomberg US Treasury 20+ Year Total Return Index, which includes US-issued 30-year Treasury bonds with a remaining maturity of 20 years or more. Due to the characteristics of long-term bonds, it is sensitive to interest rate changes, allowing for potential capital gains when interest rates decline.

Its monthly dividend feature is also attractive. Based on bond interest income, investors can receive a stable monthly cash flow. This is advantageous in a situation where market uncertainty has increased due to macroeconomic changes, as investors can receive monthly distributions along with capital gains.

Kim Seung-hyun, ETF Marketing Manager at Korea Investment Trust Management, said, "Market expectations that the Fed will gradually cut interest rates starting in September have increased, leading to significant inflows into the ACE US 30-Year Treasury Active (H) ETF. Before the rate cuts begin, investors can use this to adopt an investment strategy focused on US long-term bonds."

He added, "This product can be invested in up to 100% through pension accounts (defined contribution (DC), individual retirement pension (IRP)), and we recommend investing this way to receive tax deduction benefits."

The ACE US 30-Year Treasury Active (H) ETF is a performance-distributing product, and past performance does not guarantee future results. Principal loss may occur depending on management outcomes.