KODEX US Treasury Ultra 30-Year Futures (H) ETF Surpasses 200 Billion Won

Achieved 100 Billion KRW Net Assets in January, Reached 200 Billion KRW in 3 Months
Accelerated Individual Net Purchases... Highest Among General ETFs This Year

Individual investors' interest in long-term bonds continues to remain strong.

Samsung Asset Management announced on the 21st that the net assets of the ‘KODEX US Treasury Ultra 30-Year Futures (H) ETF’ have surpassed 200 billion KRW. Since the net asset size exceeded 100 billion KRW in January this year, it has increased to 200.6 billion KRW in about three months.

Since the 30-year US Treasury yield exceeded 4% last October, net purchases by individual investors have begun to flow actively into the KODEX US Treasury Ultra 30-Year Futures (H). This year, the pace of net purchases seems to be accelerating. In fact, individual investors have made net purchases of 95.3 billion KRW since the beginning of the year, with 34.8 billion KRW in one month and 19.7 billion KRW over the recent six trading days, showing an increasing speed of net inflows. On the 18th, individuals purchased about 6.4 billion KRW, and separately, considering that about 2.4 billion KRW of net purchases flowed through bank trust channels frequently used by individual investors, it is estimated that daily individual net purchases reached 8.8 billion KRW. The 95.3 billion KRW net purchases by individuals since the beginning of the year represent the largest scale among all general ETFs.

This preference for long-term bonds among individual investors is analyzed to be because many investors expect the overall bond interest rate level to decline from the current level, summarized as ‘Eo.Geum.Ha.’ (meaning “Anyway, interest rates will fall”). In particular, if the FOMC raises interest rates next month, it is expected that the rapid rate hike cycle aimed at stabilizing inflation since last year will come to an end. In this context, if bond yields fall in the future, long-term bonds with longer duration (average recovery period of invested funds) can generate more returns than short-term bonds, which seems to be why more individual investors are investing in long-term bonds with a long-term perspective.

The KODEX US Treasury Ultra 30-Year Futures (H) is an ETF that allows investment in 30-year US Treasury bonds with a small amount. It was listed in September 2018, and its return since the beginning of the year is 4.1%, with a 5.8% return over the past six months (based on FnGuide as of 23.04.20). The underlying index follows the S&P Ultra T-Bond Futures Excess Return Index, with a duration of about 17 years and a total expense ratio of 0.3% per year.

Im Taehyeok, Executive Director of the ETF Management Division at Samsung Asset Management, said, “The KODEX US Treasury Ultra 30-Year Futures (H) ETF is a product that has attracted high interest from investors, ranking first in individual net purchases among all general ETFs this year,” adding, “It is recognized as a comfortable investment option for income-oriented long-term investors who trust the ‘Eo.Geum.Ha.’ outlook, and the inflow of individual investors’ buying momentum is expected to continue for the time being.”

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