ACE ETF, a US Major Index-Type, Surpasses 400 Billion KRW in Net Individual Purchases Since Early This Year

Korea Investment Trust Management announced on the 15th that the net purchase amount by individual investors flowing into two exchange-traded funds (ETFs) investing in major U.S. indices has surpassed 400 billion KRW since the beginning of the year. The two products are ACE US S&P500 ETF and ACE US Nasdaq100 ETF.

According to the Korea Exchange, the net purchase amount by individual investors flowing into the ACE US S&P500 ETF and ACE US Nasdaq100 ETF from the beginning of the year until the previous day (14th) totaled 413.9 billion KRW. The net purchase amount by individuals flowing into the ACE US S&P500 ETF was 233.2 billion KRW, and for the ACE US Nasdaq100 ETF, it was 180.7 billion KRW.

As indicated by their product names, the ACE US S&P500 ETF and ACE US Nasdaq100 ETF track the U.S. Standard & Poor's (S&P) 500 Index and Nasdaq 100 Index, respectively. The ACE US S&P500 ETF was listed on the Korea Exchange in August 2020, and the ACE US Nasdaq100 ETF was listed in October 2020. Both products have shown steady growth since listing, currently recording net asset values of 1.8582 trillion KRW (ACE US S&P500 ETF) and 1.3487 trillion KRW (ACE US Nasdaq100 ETF), respectively.

A common feature of the two ACE ETFs is that they have lower actual expense ratios compared to the average of the same type, while their annual distribution yields are higher. According to ETF CHECK, the average actual expense ratio for domestically listed ETFs tracking the S&P500 index is 0.41% per year, with an annual distribution yield of 1.02%. The ACE US S&P500 ETF recorded a lower actual expense ratio (0.18% per year) and a higher annual distribution yield (1.26%) compared to the average. The Nasdaq100 index tracking ETFs show a similar pattern. The actual expense ratio for domestically listed Nasdaq100 ETFs is 0.40% per year, and the annual distribution yield is 0.58%, but the ACE US Nasdaq100 recorded 0.19% and 0.61%, respectively.

Nam Yong-su, Head of ETF Operations at Korea Investment Trust Management, explained, "The two ACE ETFs are good products for long-term installment investments," and added, "Although the U.S. stock market has recently shown volatility, considering the growth potential of the U.S. stock market from a long-term investment perspective, it is worth steadily holding these ETFs."

He continued, "The steady net buying trend by individual investors toward the ACE US S&P500 ETF and ACE US Nasdaq100 ETF is also due to the strengths these ETFs have compared to similar products," and added, "Since investment is possible up to a 70% limit within retirement pension accounts, it would be good to build a portfolio together with target-date fund (TDF) ETFs and others."

The ACE US S&P500 ETF and ACE US Nasdaq100 ETF are performance dividend-type products, and principal loss may occur depending on the management results.