Hanwha Asset Management announced on the 10th that it recommends the exchange-traded fund (ETF) 'PLUS Ilbon Enhwa Chodangi Gukchae (Synthetic)' as a long-term investment in the safe-haven asset, the Japanese yen, amid the volatility caused by the US-origin tariff war.
Based on the closing net asset value (NAV) as of the 7th, PLUS Ilbon Enhwa Chodangi Gukchae (Synthetic) has posted returns of 2.99% over the past 1 month, 9.56% over 3 months, 11.04% over 6 months, and 8.2% year-to-date. This contrasts with the poor performance of major US indices (Dow Jones, S&P 500, Nasdaq), which have experienced sharp declines of around 10% over two days following recent tariff policy announcements by US President Donald Trump.
PLUS Ilbon Enhwa Chodangi Gukchae is a currency-exposed ETF that invests in ultra-short-term government bonds with maturities within 3 months issued by the Japanese Ministry of Finance. Although the yen has recently strengthened after a period of weakness, it remains historically low, allowing investors to expect appreciation effects. This product also aims to benefit from increased bond interest income in line with rising Japanese interest rates.
Since ETFs invest in short-maturity bonds, they carry lower price volatility risk due to interest rate changes compared to products investing in long-term bonds. Based on the creditworthiness of the Japanese government, credit risk is also minimal. Investors can steadily earn bond interest income while maintaining asset value stability.
PLUS Ilbon Enhwa Chodangi Gukchae ETF can be an effective means for domestic investors, who tend to concentrate on Korean won or US dollar assets, to diversify simultaneously into the major safe currency, the Japanese yen, and ultra-short-term government bonds. It offers an investment option that combines the yen’s unique characteristics as a safe-haven asset with the stability of ultra-short-term government bonds.
PLUS Ilbon Enhwa Chodangi Gukchae is a bond-type ETF that can be invested in 100% through all accounts with tax benefits. It is the only yen investment ETF available for retirement pension (DC·IRP) accounts. Yen futures ETFs cannot be invested in retirement pension accounts, and yen deposits are not available in ISA (Individual Savings Account) accounts. PLUS Ilbon Enhwa Chodangi Gukchae ETF can be invested in all tax-advantaged accounts such as personal pensions, retirement pensions (DC·IRP), and ISAs.
Geum Jeongseop, head of the ETF Business Division at Hanwha Asset Management, explained, "Since PLUS Ilbon Enhwa Chodangi Gukchae invests in short-maturity Japanese government bonds, it carries less price volatility risk compared to products investing in long-term bonds." He added, "As it can be invested in 100% through all tax-advantaged accounts, it will be an optimal investment destination for domestic investors who tend to focus on Korean won or US dollar assets and want to allocate assets to the yen from a long-term perspective."
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