ACE High-Grade Corporate Bond Active ETF to Be Newly Listed

Korea Investment Management will list the ACE Premium Corporate Bond (AA- or higher) Active Exchange-Traded Fund (ETF) on September 9.

The ACE Premium Corporate Bond (AA- or higher) Active ETF is a product that invests in corporate bonds with a credit rating of AA- or higher, as well as mid- to short-term financial debentures. Its benchmark index is the 'KIS 1-3 Year Premium Credit (AA- or higher) Total Return Index,' calculated and published by KIS Pricing. This index is composed of financial debentures and corporate bonds that meet the following criteria: an outstanding balance of at least 50 billion KRW, a credit rating of AA- or higher, and a remaining maturity of more than one year and up to three years.

The greatest advantage of the ACE Premium Corporate Bond (AA- or higher) Active ETF is that it serves as the ETF version of the 'Korea Investment Credit Focus ESG Fund.' The Korea Investment Credit Focus ESG Fund, first launched in 2008, is Korea Investment Management's flagship bond fund. According to FnGuide, it has assets under management of 4.4328 trillion KRW, making it the largest domestic public bond fund (excluding ETFs) in Korea.

Since the ETF is a version of the Korea Investment Credit Focus ESG Fund, it is managed by the same team. The ACE Premium Corporate Bond (AA- or higher) Active ETF is managed by Park Bitnara, Head of the FI Management Division 2, and Hong Dajeong, Senior Manager, at Korea Investment Management. The FI Management Division 2, to which both managers belong, currently manages approximately 19 trillion KRW in domestic bond funds and discretionary assets, including the Korea Investment Credit Focus ESG Fund. The ACE Premium Corporate Bond (AA- or higher) Active ETF combines the proven management expertise of the Korea Investment Credit Focus ESG Fund with the advantages of ETFs, such as low cost and high accessibility.

There are also differences from the Korea Investment Credit Focus ESG Fund. While the fund includes corporate bonds with a credit rating of A- or higher, the ACE Premium Corporate Bond (AA- or higher) Active ETF only includes securities rated AA- or higher. This makes it a better investment option for investors seeking asset allocation benefits with equities and other assets, or for those with a conservative investment approach.

ETF manager Hong Dajeong stated, "In the past 20 years, there has not been a single case of distressed assets among the domestic bond holdings of our company," explaining, "This is the result of utilizing our proprietary credit investment analysis system and selecting investment assets through collaboration between credit analysts and professional managers."

She added, "Currently, the domestic ETF market has many bond ETFs that invest in ultra-short-term or ultra-long-term maturities. The ACE Premium Credit (AA- or higher) Active ETF is differentiated in that it invests in high-quality corporate bonds with mid- to short-term maturities."

Both the ACE Premium Corporate Bond (AA- or higher) Active ETF and the Korea Investment Credit Focus ESG Fund are performance-based products, and investors may incur principal losses depending on investment results.