Ants' Summer 'Preparing for Winter with KB Bond ETF Net Buying'

[Asia Economy Reporter Junho Hwang] Quick-moving individual investors (retail investors) have started betting on the decline of market interest rates.

According to KB Asset Management on the 5th, retail investors made net purchases of KB Asset Management's bond ETFs worth 45 billion KRW last month. This is nearly double the amount of 25.1 billion KRW recorded in March, the highest this year. Individual investors have purchased a total of 131 billion KRW this year alone.

KB Asset Management is the asset manager with the largest number of bond ETFs in Korea. As of the end of last month, there are a total of 71 bond ETFs listed domestically, of which KB Asset Management manages 20. KB Asset Management offers a product lineup of 15 domestic and 5 overseas bond ETFs, including 5 inverse ETFs.

By product, KBSTAR KIS 30-Year Treasury Enhanced attracted 6.7 billion KRW. Following that were KBSTAR Short-Term Monetary Stabilization Bonds (4.2 billion KRW), KBSTAR KIS Short-Term Comprehensive Bonds (AA- or higher) Active (2.5 billion KRW), KBSTAR U.S. Long-Term Treasury Futures (H) (2.0 billion KRW), and KBSTAR 10-Year Treasury Futures (1.7 billion KRW) in order of net purchase size.

KBSTAR KIS 30-Year Treasury Enhanced has the longest weighted average maturity among domestic bond ETFs. The longer the weighted average maturity, the higher the price volatility of bonds due to interest rate changes, indicating that more individual investors expect market interest rates to decline.

In July, when the monthly treasury bond interest rate fell significantly (from 3.32% to 3.03%), KBSTAR KIS 30-Year Treasury Enhanced recorded a return of 11.5%.

Geum Jeongseop, Head of ETF Marketing at KB Asset Management, said, "As the range of bond ETF products has diversified, investment is possible in both rising and falling interest rate environments," adding, "Given the increased volatility in the bond market these days, it is important to choose ETFs that match one's investment objectives."

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