"KB US Mid-Short Term Treasury Fund" Surpasses 30 Billion KRW in Net Assets

Securing Stable Interest Income
Through US Mid-Short Term Treasury Investments

Amid rising expectations for interest rate cuts and increasing demand for safe-haven assets, investors are focusing on bond-centered asset allocation strategies.

KB Asset Management announced on May 22 that its "KB US Mid-Short Term Treasury Fund" surpassed 30 billion KRW in net assets just four months after its launch.

The KB US Mid-Short Term Treasury Fund is the only fund in the industry dedicated to US mid-short term Treasuries. It is gaining attention as an alternative that can both effectively respond to volatile market conditions and pursue stable returns. Over the past month, it has attracted more than 10 billion KRW in new investments.

The fund is composed of 30% US Treasuries with maturities of 3 to 10 years and 70% related exchange-traded funds (ETFs). Without including risk assets such as credit bonds, it seeks stable interest income through pure investment in US mid-short term Treasuries with an average credit rating of 'AA+'.

Mid-term bonds are expected to provide stable returns due to their lower interest rate sensitivity and volatility compared to long-term bonds, and can also offer additional capital gains in a rate-cutting environment. Historically, US mid-short term Treasuries have delivered strong performance with lower volatility than long-term bonds during periods of interest rate cuts.

The KB US Mid-Short Term Treasury Fund is recommended for investors who wish to manage the risk of rising interest rates while seeking returns from falling rates. By investing in US dollar-denominated bonds, which have higher interest rates than those of other developed countries, the fund can secure higher interest income compared to bonds in other developed market currencies. In addition, because its correlation with equities is low, it offers the advantage of relatively preserving investors' assets during stock market corrections caused by economic downturns.

Yeon Chisang, Head of Overseas Bond Management at KB Asset Management, stated, "With growing uncertainty in tariff policies, the US is expected to resume interest rate cuts in the second half of the year and lower rates to a neutral level by 2027. Accordingly, we expect market interest rates to decline as well."

Yeon added, "With a target duration of about 5.5 years, the KB US Mid-Short Term Treasury Fund will provide efficient investment opportunities while reducing volatility during periods of interest rate cuts."

The KB US Mid-Short Term Treasury Fund is available in two types: currency-hedged (H) and unhedged (UH). It can be purchased through KB Kookmin Bank, Gwangju Bank, KB Securities, and other distributors. The number of distributors is steadily expanding.