KB Asset Management to List 30-Year Government Bond Leverage ETF on the 14th

[Asia Economy Reporter So-yeon Park] KB Asset Management is launching a 30-year government bond leveraged exchange-traded fund (ETF).

The price per unit of the KBSTAR Gukchae 30-Year Leverage KAP (Synthetic) ETF is 20,000 KRW, and it will be listed on the 14th.

As expectations grow that the recent interest rate hike cycle is coming to an end, the number of investors betting on falling interest rates to achieve high capital gains is increasing.

The KBSTAR Gukchae 30-Year Leverage KAP (Synthetic) ETF aims to track twice the daily return of the KAP Gukchae 30-Year Total Return Index.

The underlying index, the KAP Gukchae 30-Year Total Return Index, consists of three 30-year government bonds weighted 50%, 30%, and 20% respectively, based on the most recent issuance order, with a duration of 19.2 years.

The duration of the KBSTAR Gukchae 30-Year Leverage KAP (Synthetic) ETF is 38.5 years, making it the longest duration among domestic bond ETFs.

Since ETFs of ultra-long-term bonds over 30 years have long durations, their price volatility increases with interest rate changes, allowing for high returns when interest rates fall.

Geum Jeong-seop, Head of ETF Marketing at KB Asset Management, explained, "The KBSTAR Gukchae 30-Year Leverage KAP (Synthetic) ETF is the most proactive means to invest in falling interest rates. However, since opinions on the upper limit of interest rates vary, investors should carefully consider their own risk tolerance before investing."

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