'SOL Short-Term Bond Parking-Type' ETF Series Surpasses 1 Trillion Won in Net Assets

Shinhan Asset Management announced on June 13 that its series of short-term bond parking-type ETFs has surpassed 1 trillion won in net assets. The net assets of SOL Ultra-Short-Term Bond Active and SOL Mid-Short-Term Corporate Bond (A or higher) Active were reported at 842.1 billion won and 183.7 billion won, respectively.

Thanks to the competitive expected yield to maturity (YTM) that stands out compared to other short-term financial products, a large influx of retail funds has come from individual investors and bank clients. Since the beginning of this year, short-term interest rates have declined, with KOFR (Korea Overnight Financing Repo Rate) and CD 91-day rates recently remaining at the 2.5% to 2.6% level.

The YTM of SOL Ultra-Short-Term Bond Active is 2.9%, the highest among short-term bond parking-type ETFs, while SOL Mid-Short-Term Corporate Bond (A or higher) Active records 3.3%.

SOL Ultra-Short-Term Bond Active ETF, since its listing in November 2023, has achieved an annualized return of 4% through active portfolio management and a strategy of including high-quality short-term bonds, even as the base rate dropped from 3.5% to 2.5%.

Heo Ikseo, Head of Bond ETF Management at Shinhan Asset Management, said, "SOL short-term fund parking-type ETF provides returns that exceed those of bank deposits and MMFs by investing in undervalued high-quality securities based on thorough credit analysis."

He added, "Since its listing, it has consistently maintained a top-tier YTM in the industry," and explained, "With the Bank of Korea sharply lowering its growth forecast for this year, the likelihood of an additional base rate cut has increased."

SOL Ultra-Short-Term Bond Active ETF builds its portfolio mainly with high-quality ultra-short-term bonds (credit rating A- or higher) with a remaining maturity of less than three months, as well as commercial papers (A2- or higher), thereby reducing risk from interest rate fluctuations. By selectively investing in undervalued high-quality securities, it seeks excess returns through additional interest income.

SOL Mid-Short-Term Corporate Bond (A or higher) Active ETF selectively invests in credit bonds such as corporate bonds and other financial bonds with a remaining maturity of up to three years. By managing a duration of around 1.5 years, it aims to maximize capital gains from interest rate changes and seeks excess returns over market rates as a short-term fund parking-type ETF.