SOL Ultra-Short-Term Bond Active ETF Delivers Top Performance Among Short-Term Bond Parking-Type ETFs

Shinhan Asset Management announced on the 30th that the SOL Ultra-Short-Term Bond Active ETF has attracted 136 billion KRW in inflows since the beginning of the year, as it has consistently maintained a YTM (yield to maturity) in the 3% range despite declining short-term interest rates. The net asset value, which stood at around 480 billion KRW at the end of last year, has increased to 762.1 billion KRW.

Since the beginning of the year, short-term interest rates have declined, with the KOFR (Korea Overnight Financing Rate) and the 91-day CD rate recently at the 2.7% to 2.8% level, and the 6-month time deposit rate falling to 2.4%. The SOL Ultra-Short-Term Bond Active ETF currently records a YTM of 3.08%, the highest among ultra-short-term bond parking-type ETFs.

Since its listing in November 2023, the SOL Ultra-Short-Term Bond Active ETF has achieved an annualized return of 4.04% through active portfolio management and a strategy of including high-quality short-term bonds, even as the base rate was reduced from 3.5% to 2.75%.

Heo Ikseo, Head of Bond ETF Management at Shinhan Asset Management, said, "Amid growing uncertainty in the global financial market and declining short-term and deposit interest rates, demand for parking-type ETFs based on short-term bonds has been steadily increasing."

He added, "Since its listing, the SOL Ultra-Short-Term Bond Active ETF has consistently maintained the highest level of YTM and competitive performance, making it a steady choice for short-term fund investors."

The SOL Ultra-Short-Term Bond Active ETF builds its portfolio around high-quality ultra-short-term bonds (with a remaining maturity of within three months and a credit rating of A- or higher) and commercial papers (A2- or higher), thereby reducing risks associated with interest rate fluctuations. In addition, it pursues excess returns by selecting undervalued high-quality issues to secure additional interest income.

Unlike other parking-type ETFs, which are classified as risky assets, this product is classified as a safe asset, allowing 100% of retirement pension (DC/IRP) account reserves to be invested. It is also highly useful in ISA (Individual Savings Account) accounts, meeting a variety of investment needs.

It allows investors to buy and sell freely at any time, so they can earn interest income only for the needed period without tying up funds for a long time, and convert to cash when funds are needed, making it suitable for investors who wish to manage surplus funds flexibly.