Hyundai Motor Securities "Managing Volatility Risk with Koreit Select Short-Term Bond Fund"

A Fund Managing Interest Rate Volatility Risk with Short Duration

The global stock market, which had maintained an upward trend in the first half of the year, turned to a downward trend from the third quarter, deepening investors' concerns about investment strategies for the second half of the year. There are also ongoing forecasts that the timing of interest rate cuts in various countries may be delayed longer than expected, leading to rising domestic and international market interest rates and increased volatility.

According to Hyundai Motor Securities on the 26th, in such a market where it is difficult to predict a clear direction, investing in short-term products with a short investment horizon is a way to reduce risk.

Accordingly, Hyundai Motor Securities recommended the Koreate Select Short-Term Bond Fund. As the fund name suggests, the Koreate Select Short-Term Bond Fund invests in short-term bonds. It invests more than 60% of the fund assets in electronic short-term bonds and commercial papers with a credit rating of A2- or higher, and corporate bonds with a credit rating of A- or higher.

By adjusting the proportion of electronic short-term bonds and commercial papers with a remaining maturity of about one year, the fund duration is managed at approximately 0.5 to 1 year, and the short duration helps reduce yield fluctuations caused by interest rate changes.

Based on Class C as of the 10th, it has recorded a recent 3-month return of 1.26% and a 6-month return of 2.40%, showing a favorable annualized return of 4.96% over 3 months. This suggests it could be an effective portfolio composition product in the event of increased stock market volatility toward the end of the year.

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