'KODEX KOFR Interest Active ETF' That Attracted Institutional Funds Within a Month of Listing

Surpassing 500 Billion KRW in Net Assets in One Month
Noted as an Investment Tool During Rising Interest Rates

[Asia Economy Reporter Hwang Yoon-joo] Samsung Asset Management's 'KODEX KOFR Interest Rate Active (Synthetic) ETF,' which was listed last month, surpassed 500 billion KRW in net assets in about a month since its listing.

Samsung Asset Management announced on the 30th that the net asset size of the 'KODEX KOFR Interest Rate Active (Synthetic) ETF' reached a total of 500.6 billion KRW.

Listed in April, the 'KODEX KOFR Interest Rate Active (Synthetic) ETF' is the first domestic ETF that tracks the yield of the Korea Overnight Financing Rate (KOFR) index. KOFR, calculated by the Korea Securities Depository, is based on repurchase agreement (RP) transaction data secured by government bonds and monetary stabilization bonds.

Since it is calculated based on actual transaction data, it is close to risk-free and has a higher reliability than the existing benchmark interest rate, the CD rate, which is calculated based on opinions from financial institutions and is more susceptible to manipulation.

The KODEX KOFR Interest Rate Active ETF is rapidly attracting institutional funds as a safe investment tool with no capital loss even during rising interest rate periods. It is also gaining popularity among individual investors as a convenient way to manage idle funds.

Instead of depositing cash in securities accounts, investors maximize operational returns by purchasing the KOFR Interest Rate Active ETF, which allows them to earn relatively high interest rates even with just one day of investment. Generally, the average deposit utilization fee rate obtainable by depositing in securities accounts is less than 0.25% per annum, but the KOFR rate was 1.799% as of the 26th.

Im Tae-hyuk, head of ETF operations at Samsung Asset Management, said, "With the normalization trend of the base interest rate and increased interest rate volatility, inquiries from bond investment institutions about the KOFR Interest Rate Active ETF are surging, and inflows from not only institutions but also individual investors are noticeably increasing."

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