TIGER USD Short-Term Bond Active ETF Surpasses KRW 300 Billion in Net Assets

[Asia Economy Reporter Junho Hwang] The net assets of Mirae Asset Global Investments' 'TIGER US Dollar Short-Term Bond Active Exchange-Traded Fund (ETF),' the only ETF that can invest in dollars within retirement pension accounts, surpassed 300 billion KRW on the 28th.

It took only 2 years and 8 months since the ETF's listing (July 2019), which is attributed to the recent increase in investment demand for the dollar due to the rise in the KRW-USD exchange rate.

This product is an ETF that allows investors to gain from both KRW-USD exchange rate fluctuations and short-term bond performance simultaneously. It invests in bonds with less than one year remaining maturity issued in US dollars, and there is no need to open a separate account like MMF or CMA. Since it has no maturity, there is no inconvenience related to maturity extensions. Additionally, it offers lower trading costs compared to direct trading of overseas ETFs.

Notably, this product is the only US dollar ETF listed domestically that can be invested in through retirement pension accounts. Unlike pension savings accounts where only leverage and inverse ETFs are restricted, ETFs investing in futures are also not allowed in retirement pension accounts.

The ETF's benchmark index is the 'KIS US Treasury Bond 0-1Y Index.' This index consists of US Treasury Notes with remaining maturities between 1 month and 1 year, denominated in US dollars. To achieve excess returns compared to the benchmark, the ETF invests not only in US Treasury bonds but also in high-quality US investment-grade corporate bonds such as Apple and Microsoft, as well as KP (Korea Paper, Korean bonds issued in US dollars) issued by domestic public institutions. The ETF manages its weighted average maturity (duration) to be similar to the benchmark index, around 6 months.

Jung Eui-hyun, team leader of the ETF management division at Mirae Asset Global Investments, said, "Recent US Federal Reserve interest rate hikes and Russia's invasion of Ukraine have increased demand for the dollar, a representative safe asset," adding, "The TIGER US Dollar Short-Term Bond Active ETF is a product that can generate returns not only from the dollar exchange rate but also from short-term bond management."

This content was produced with the assistance of AI translation services.