Samsung Asset Management "KODEX US Nasdaq 100 TR, Top Fund Inflow in Same Category Last Year"

Samsung Asset Management announced on the 3rd that the KODEX US Nasdaq 100 TR Exchange-Traded Fund (ETF), which invests in the US Nasdaq 100, recorded the largest fund inflow among similar products last year, amounting to 895.3 billion KRW. This figure represents more than a 14-fold increase compared to the previous year, and the net assets nearly doubled from 590.2 billion KRW to 1.74 trillion KRW within one year.

KODEX US Nasdaq 100 TR is an ETF that tracks the Nasdaq 100 index, known as a representative US technology stock index, investing in major US big tech companies such as Microsoft, Apple, and Nvidia. Last year, driven by the strong performance of AI-related stocks, the Nasdaq 100 index rose by 25.9%, and KODEX US Nasdaq 100 TR achieved a high return of 45.9%, boosted further by the effect of exchange rate appreciation.

This product operates on a Total Return (TR) basis, which means it does not distribute dividends generated from the assets included in the Nasdaq 100 index to investors but automatically reinvests them into the fund. This approach offers the advantage of potentially higher returns when stock prices rise. In fact, KODEX US Nasdaq 100 TR recorded the highest performance among similar passive products with returns of 45.9% last year, 136.5% over two years, and 63.6% over three years.

Considering that investors reinvesting dividends themselves in general accounts are subject to withholding tax on dividend income and incur transaction fees and actual execution costs due to bid-ask spreads, automatic reinvestment within the fund is inevitably more advantageous for long-term returns. This is why TR products are regarded as most suitable for long-term installment investment products.

To promote the advantages of these TR products and encourage long-term installment investments by individual investors, Samsung Asset Management lowered the total expense ratio of KODEX US Nasdaq 100 TR and KODEX US S&P 500 TR?the only domestic currency-exposed US representative index TR products?to 0.0099% in April last year. This decision also reflected the judgment that US representative index products are suitable as mid- to long-term investment products for individual investors.

Thanks to these efforts, individual net purchases of KODEX US Nasdaq 100 TR reached 434.8 billion KRW since April, attracting significant interest with a total inflow of 505.2 billion KRW last year.

A similar trend was observed in KODEX US S&P 500 TR, which saw fund inflows of 2.5507 trillion KRW last year, a more than 17-fold increase compared to the previous year. Its net asset size also surged sharply by 421%, from 681.9 billion KRW last year to 3.5248 trillion KRW. Notably, it recorded returns of 44.3% last year, 88.1% over two years, and 59.8% over three years, showing the highest performance among similar passive products.

Accordingly, the combined net assets of KODEX US index TR-type products reached 5.2697 trillion KRW last year.

Meanwhile, considering the increase in net assets and investment returns of these US index TR-type products, it is estimated that investments in TR-type products have significantly increased in retirement pension (DC/IRP) accounts, which are very advantageous for individual investors to invest in mid- to long-term installment plans. This suggests that the relative preference of individual investors for these products is expected to continue.

Kim Dohyung, Head of ETF Consulting at Samsung Asset Management, stated, “For pension investors planning long-term installment investments, US index TR-type products will be relatively better investment options,” adding, “For young investors starting investments using pension savings, retirement pensions, or ISAs, KODEX US Nasdaq 100 TR would be a good choice as their first pension financial product.”