Samsung Asset Management's KODEX KOFR Interest Rate Active ETF Surpasses 1 Trillion KRW in Net Assets in Record Short 57 Days

The Only Asia ETF Listed This Year to Achieve 1 Trillion KRW in Net Assets

[Asia Economy Reporter Hwang Yoon-joo] Since the introduction of ETFs in Korea, the record for the shortest period to surpass 1 trillion KRW has been broken.

Samsung Asset Management announced on the 27th that the 'KODEX KOFR Interest Rate Active (Synthetic) ETF' surpassed 1 trillion KRW in net assets, reaching 1.1223 trillion KRW on the 23rd, just 57 days after its listing. This is the only record among ETFs listed in the Asian market this year, and the KODEX KOFR Interest Rate Active ETF quickly rose to 19th place in domestic ETF net assets.

The KODEX KOFR Interest Rate Active ETF is the only domestic ETF that tracks the return of the Korea Overnight Financing Rate (KOFR) index. KOFR is Korea's version of the risk-free reference rate (RFR) and is calculated based on overnight repurchase agreement (RP) transaction data secured by government bonds and monetary stabilization bonds. After the LIBOR manipulation scandal in 2012, Korea, led by the Financial Services Commission, began developing a risk-free reference rate and launched KOFR through the Korea Securities Depository last November.

The achievement of 1 trillion KRW by the KODEX KOFR Interest Rate Active ETF was largely influenced by significant inflows from institutional and corporate funds. The KODEX KOFR Interest Rate Active ETF is easy to set up and redeem not only through on-exchange trading but also over-the-counter, and since interest income is confirmed daily on each business day, it is considered a suitable alternative for REPO purchases aimed at liquidity management. In fact, despite the KOFR interest rate rising from 1.577% per annum to 1.738% per annum over the past month, the annualized yield reached 1.734% (from May 23 to June 23, period yield 0.147%).

Meanwhile, the KODEX KOFR Interest Rate Active ETF has the advantage that even investing for just one day can yield relatively higher returns compared to the average deposit fee of securities firms, leading to an increase in on-exchange trading by individual smart investors.

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