Hantoo Asset Management, ACE KRX Gold Spot ETF... "325% Increase in Net Assets This Year"

Korea Investment Trust Management announced on the 28th that the total net assets of the ACE KRX Gold Spot Exchange-Traded Fund (ETF) increased by 325% this year.

According to the Korea Exchange, as of the 25th of this month, the total net assets of the ACE KRX Gold Spot ETF have increased by 325.44% since the beginning of 2024. The total net assets of this ETF at the end of last year were around 109.5 billion KRW, but it recorded 465.9 billion KRW. It has shown an explosive growth trend, with an increase of 105.7 billion KRW in just the past month.

Interest from individual investors in the ACE KRX Gold Spot ETF continues as well. The net purchase amount by individuals since the beginning of the year reached 143.7 billion KRW. Furthermore, analyzing the net purchase flow by individuals from June 21, except for just two days on September 9 and 10, individual investors maintained a net buying trend totaling 86.1 billion KRW over 82 trading days. The net purchase amount by individual investors over the past month was also recorded at 39.9 billion KRW.

The returns are also excellent. Among 23 domestically listed commodity ETFs excluding leveraged types, this product ranked first in returns over 6 months, year-to-date, and 1-year periods. The 6-month return was 23.31%, while the year-to-date and 1-year returns were 47.81% and 49.39%, respectively.

This is interpreted as due to investors’ growing interest in gold investment. As the U.S. Federal Reserve (Fed) began cutting interest rates in earnest, demand surged for gold investment, which is regarded as a representative inflation hedge. Additionally, geopolitical risks contributed to continued gold purchases by major central banks, and recently, gold prices surpassed $2,700, setting a new high.

The ACE KRX Gold Spot ETF, listed in December 2021, is the first and only ETF in Korea investing in physical gold, and within just over three years since its listing, it has become one of Korea Investment Trust Management’s flagship products. Its underlying index tracks the “KRX Gold Spot Index” calculated and published by the Korea Exchange. As a physical gold investment product, it has the advantage of no rollover costs compared to gold futures ETFs. Moreover, it is currently the only gold-related ETF listed domestically that can be invested in through retirement pension accounts. Due to these differentiating factors, this ETF attracts investors looking for a long-term gold investment method.

Nam Yong-su, Head of ETF Management at Korea Investment Trust Management, said, “This is a time when investors can consider including safe assets in their portfolios as a way to allocate assets in preparation for financial market volatility caused by interest rate cuts and geopolitical risks.” He added, “The ACE KRX Gold Spot ETF, which invests in gold regarded as a global safe asset, is the only physical gold ETF in Korea.”

He also added, “Please remember that the ACE KRX Gold Spot ETF can be invested in retirement pension accounts up to a 70% limit and offers tax credit benefits for long-term investments.”