Hantoo Asset Management's ACE CD Interest Rate & Ultra-Short-Term Bond Active ETF Surpasses 200 Billion KRW in Net Assets

Korea Investment Trust Management announced on the 25th that the net asset value of the parking-type exchange-traded fund (ETF), ACE CD Interest Rate & Ultra-Short-Term Bond Active ETF, has surpassed 200 billion KRW.

According to the Korea Exchange, as of the 22nd, the net asset value of the ACE CD Interest Rate & Ultra-Short-Term Bond Active ETF was recorded at 200.5 billion KRW. This means it exceeded 200 billion KRW within three months since its listing in July this year. On the 24th, the net asset value was 203 billion KRW.

Parking-type ETFs are products that manage investment funds safely over a short period, applying interest rates from certificates of deposit (CDs) or Korea Overnight Financing Rate (KOFR) ultra-short-term bonds on a daily basis and compounding them. Thanks to the advantage of accumulating interest income daily and receiving an annualized return for the investment period, the market size is rapidly expanding.

The ACE CD Interest Rate & Ultra-Short-Term Bond Active ETF is characterized by including CDs with maturities of three months or less along with ultra-short-term bonds, aiming for higher returns than CD interest rates. As of the previous day, the annualized yield to maturity (YTM) was 3.65%, higher than the 91-day CD rate of 3.40%.

Capital inflows into pension accounts are also notable. Since the listing of the ACE CD Interest Rate & Ultra-Short-Term Bond Active ETF, the total amount of funds flowing into pension accounts has reached 181.3 billion KRW. Parking-type ETFs can be fully included not only in pension savings accounts but also in defined contribution (DC) retirement pensions and individual retirement pensions (IRP), making them suitable for managing cash-equivalent assets. The high YTM recorded by this ETF has emerged as an investment attraction.

Nam Yong-su, Head of ETF Management at Korea Investment Trust Management, explained, "As more investors analyze the unique strengths of each product and invest accordingly, the era of Parking-type ETF 2.0 has begun, focusing on products that pursue plus-alpha returns among parking-type products."

He added, "In a highly volatile market, investing in the ACE CD Interest Rate & Ultra-Short-Term Bond Active ETF, which has a higher YTM compared to similar products, and then selling this ETF to buy semiconductor and big tech ETFs when the market environment becomes favorable to the stock market is also a good strategy."

Meanwhile, the ACE CD Interest Rate & Ultra-Short-Term Bond Active ETF is a performance-dividend type product, and principal loss may occur depending on the management results.