KODEX Currency-Hedged US Index ETFs Surpass KRW 1 Trillion in Net Assets

Currency-hedged products are emerging as an alternative for U.S. stock investors concerned about a decline in the KRW-USD exchange rate.

On April 29, Samsung Asset Management announced that the net assets of two ETFs?KODEX US S&P500(H) and KODEX US NASDAQ100(H), which invest in major U.S. indices?have surpassed 1 trillion KRW. Since their listing in December 2022, the net assets of these two products have grown to 690.8 billion KRW and 386.8 billion KRW, respectively, over approximately two years and four months.

Growth has accelerated this year. At the end of last year, the combined net assets of KODEX US S&P500(H) and KODEX US NASDAQ100(H) stood at 353.4 billion KRW and 320.4 billion KRW, respectively, totaling 673.8 billion KRW. In just about four months, this figure has increased by approximately 59.9%.

It is analyzed that investment funds have flowed into currency-hedged ETFs as the strong dollar reached its peak in early April following the escalation of the U.S.-driven global tariff war, and then entered a volatile phase with repeated rises and falls. The KRW-USD exchange rate surged from 1,303 KRW in October last year to 1,467.5 KRW by year-end. On April 9, the exchange rate hit a 16-year high of 1,484.1 KRW, before dropping to 1,416 KRW on April 17. Recently, it has rebounded to the 1,440 KRW range.

Amid growing volatility in exchange rates due to uncertain global economic conditions, a flexible strategy for responding to currency fluctuations is increasingly necessary. Oh Seunghoon, Head of Investment Research at Samsung Asset Management, stated, "Given uncertainties in tariff negotiations and anticipated demands for currency appreciation, we expect a downward trend in the KRW-USD exchange rate to prevail through the second and third quarters of this year."

KODEX US S&P500(H) and KODEX US NASDAQ100(H) allow investors to invest in major U.S. indices while mitigating currency fluctuation risks through currency hedging.

Han Donghoon, a manager at Samsung Asset Management, explained, "Recently, more investors are seeking buying opportunities amid corrections in the U.S. stock market, and concerns about the exchange rate remaining in the 1,400 KRW range are significant." He added, "Currency-hedged ETFs can serve as a useful alternative for mid- to long-term investors, as they allow investment in U.S. stocks while reducing currency risk."