KODEX Money Market Active ETF Surpasses KRW 6 Trillion in Net Assets in Just Nine Months

As market volatility persists in this era of uncertainty, investors' short-term funds are increasingly flowing into parking-type ETFs. Analysts note that as the size of assets under management (AUM) in money market funds (MMFs) grows, so do their liquidity and stability, leading to a concentration of capital in products with larger net asset values.

Samsung Asset Management announced on the 28th that the KODEX Money Market Active ETF has surpassed KRW 6 trillion in net assets in just about nine months since its listing.

Nearly KRW 2 trillion has flowed into the fund this year alone, and individual investors have recorded net purchases of KRW 190.7 billion, demonstrating rapid growth. This trend is interpreted as a result of increased demand for short-term fund management among investors, driven by heightened domestic and international political and economic uncertainty, as well as the ongoing domestic interest rate cuts.

The KODEX Money Market Active ETF is designed based on the management approach of MMFs, investing in highly liquid assets with strong credit ratings, such as ultra-short-term bonds and commercial paper (CP). While its portfolio composition is similar to that of typical MMFs, it is subject to less stringent regulatory constraints, allowing for more flexible management. To minimize risks related to interest rate fluctuations or market volatility, the fund strictly limits its investment targets and structures its portfolio around high-credit assets, thereby enhancing stability.

For MMFs investing in the short-term financial market, a larger AUM enables greater diversification across various assets, thereby increasing both liquidity and stability. Experts advise that AUM should be a key criterion when selecting MMF products. Currently, the KODEX Money Market Active ETF ranks fourth among 971 domestically listed ETFs in terms of net assets, with a net asset value of KRW 6.0305 trillion. It is not only the largest among money market ETFs but also the largest among all short-term parking-type ETFs.

With the base interest rate now lowered to 2.75% per annum, both institutional and individual investors are focusing on the fund, attracted by its potential to deliver higher returns than conventional MMFs. Since its listing in August, the KODEX Money Market Active ETF has posted an annualized return of 3.61%, drawing significant interest from institutional investors seeking short-term fund management solutions.

The ETF offers a 'next-day redemption' feature, allowing funds to be withdrawn on the next business day after a sale through off-exchange creation and redemption. This makes it an attractive vehicle for institutional investors who prioritize liquidity. The recent surge in demand for short-term liquidity has also led to a sharp increase in product inquiries and seminar requests from institutional investors. The fund is recognized for demonstrating differentiated competitiveness as a short-term investment vehicle amid heightened market volatility.

The KODEX Money Market Active ETF is listed at KRW 100,000 per share, and, due to the nature of ETFs, bid and ask prices are quoted in KRW 5 increments, significantly reducing transaction costs for investors. Since listing, the difference between the daily high and low prices has remained within KRW 5, indicating minimal price fluctuation and enabling investors to trade efficiently and conveniently in their desired amounts.

Yoon Seongin, a manager at Samsung Asset Management, stated, "As uncertainty in the financial markets increases, demand for short-term safe assets is rising sharply," adding, "KODEX Money Market Active will provide investors with a stable yet flexible short-term fund management solution."

In addition, the ETF is gaining attention as a useful alternative for managing idle funds within pension portfolios, as it can be fully included in individual retirement pension (IRP, DC) accounts. Amid growing market uncertainty, it is establishing itself as a short-term investment product that combines both stability and convenience.