The KODEX US Money Market Active ETF, which invests simultaneously in ultra-short-term safe assets in the US and the US dollar, surpassed 200 billion KRW in net assets just two weeks after its listing. This surge is attributed to strong demand from investors seeking stable interest income in a high-interest-rate environment.
Samsung Asset Management announced on the 28th that the net assets of the KODEX US Money Market Active, which was listed on the 13th, have reached 209.5 billion KRW.
The KODEX US Money Market Active is the first US money market ETF in Korea to invest simultaneously in ultra-short-term safe assets in the US and the US dollar. As market volatility has increased significantly, investors are looking for short-term, dollar-based investment options that minimize risk. Investors can directly access the US money market without the need to exchange KRW for USD. Additionally, the ETF's per-share price is set at approximately 10 USD, allowing customers to intuitively track returns and enhancing investment convenience.
The product is also attractive because it offers the lowest fee and the highest monthly distribution rate among similar products in Korea. KODEX US Money Market Active seeks higher interest rates than the US base rate and provides monthly dividends to investors.
The US base rate currently stands at 4.25% to 4.50% per annum, which is 1.75 percentage points higher than Korea's 2.75% per annum. This explains the higher expected returns of US money market products. The benchmark index consists of US Treasury securities with maturities of 1 to 3 months (with interest rates around 4.18%), US 7-day repurchase agreements (repos), and the US Secured Overnight Financing Rate (SOFR).
The ETF also partially includes US agency bonds, financial bonds, and corporate bonds with a global credit rating of A- or higher, aiming to achieve higher yields than the benchmark index. The annual distribution rate is expected to be around 4.7% based on the yield to maturity (YTM), which is the highest among similar products listed in Korea. Interest income is accumulated daily at the YTM level of dollar-denominated assets and distributed at the end of each month.
Minimizing investment costs is another strength of the product. The total fee is 0.05% per annum, the lowest among similar products. Instead of the traditional indirect investment method of including existing ETFs, the fund invests directly in US money market physical bonds, so there are no additional costs beyond the total fee.
Shin Hyunjin, a manager at Samsung Asset Management, emphasized, "As expectations for US interest rate cuts have diminished, the high-interest-rate environment is expected to persist for the time being. This product is ideal for investors seeking stable interest income and offers higher monthly dividends than other money market products." He added, "We recommend it as a suitable product for long-term investment, such as in retirement pension accounts."
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