Shinhan Asset Management Launches New Shinhan US Long-Term Bond Plus Fund

Shinhan Asset Management announced on the 30th the launch of the ‘Shinhan US Long-Term Bond Plus Fund’.

The Shinhan US Long-Term Bond Plus Fund invests in US long-term Treasury bonds and US Treasury bonds (ETFs) with a remaining maturity of around 15 years to secure stable interest income while pursuing relatively high capital gains when interest rates decline. The portfolio consists of more than 70% US long-term Treasury bonds and US Treasury bond exchange-traded funds (ETFs). Additionally, it utilizes US corporate bonds and short-term liquidity products to adjust weights according to market conditions to secure additional returns.

This fund is characterized by direct physical investment in US long-term Treasury bonds, reducing management fees and transaction costs. As of the 15th, the fund’s expected annualized yield to maturity (YTM) is 4.47%. The duration is around 15 years. It is currently available for subscription through Shinhan Investment Corp., Samsung Securities, Korea Investment & Securities, Kiwoom Securities, and from September, sales will expand to include Gwangju Bank and Woori Investment & Securities.

With Federal Reserve Chairman Jerome Powell hinting at a rate cut in September, market interest in US bond assets is increasing. Especially during rate cut periods, long-term bonds are expected to outperform medium- to short-term bonds. Since 1974, during 11 rate cut cycles, US long-term Treasury bonds recorded an average annual return of 14.1%, outperforming medium- to short-term bonds (11.5%). Furthermore, in situations like the recent one where rate cuts are expected without a recession, US corporate bond investments have also shown excellent performance.

Kang Pan-seok, head of the overseas bond management team at Shinhan Asset Management, said, “With the anticipated US rate cuts, the Shinhan US Long-Term Bond Plus Fund, which offers stable income and capital gains, is a must-have product in portfolios,” adding, “The Shinhan US Long-Term Bond Plus Fund, which diversifies investments in US long-term Treasury bonds and high-quality corporate bonds, will be an effective investment solution for investors who are usually unfamiliar with investing in the US bond market.”