RISE Short-Term Special Bank Bond Active ETF Surpasses 1 Trillion Won in Net Assets

KB Asset Management announced on the 16th that the 'RISE Short-Term Special Bank Bond Active ETF' surpassed 1 trillion won in net assets just 14 trading days after its listing.

Amid increasing interest in short-term investment products due to heightened interest rate volatility, the ETF has shown remarkable growth. It is emerging as a new alternative in the short-term fund management market.

Listed on June 24, the RISE Short-Term Special Bank Bond Active ETF is the first exchange-traded fund (ETF) in Korea to invest in ultra-short-term 'AAA' rated bonds issued by special banks. It primarily includes bonds issued by Korea's three major special banks: Korea Development Bank, Export-Import Bank of Korea, and Industrial Bank of Korea.

Because these bonds are issued by special banks with the government as the largest shareholder and maintain the highest credit rating (AAA), they are considered to have government bond-level stability. In addition, they are expected to offer an average additional yield of 0.2 percentage points over government bonds.

Special bank bonds, as an asset class with both high liquidity and stability, are attracting attention as a competitive alternative to existing short-term interest rate products such as money market funds (MMF), certificates of deposit (CD), and Korea Overnight Financing Rate (KOFR) products. Last year, the issuance volume of special bank bonds was about 125 trillion won, accounting for approximately 58% of the entire special bond market.

KB Asset Management structured the RISE Short-Term Special Bank Bond Active ETF mainly with ultra-short-term bonds, making it suitable as a 'parking-type ETF' for temporary idle funds or short-term liquidity management. The average duration is set at about 0.25 years, minimizing the risk of valuation losses due to interest rate fluctuations.

The RISE Short-Term Special Bank Bond Active ETF is classified as having a 0% risk-weighted asset (RWA), so it does not affect capital adequacy indicators (such as BIS and RBC) for financial institutions like banks and insurers. Therefore, it is an efficient tool for managing reserve funds.

No Areum, Head of ETF Business Division at KB Asset Management, said, "Investor interest in short-term parking-type products is increasing amid recent market uncertainty," adding, "'RISE Short-Term Special Bank Bond Active ETF' is a practical product that offers both government bond-level stability and higher yields than government bonds."