KB Asset Management, Industry's First Maturity Redemption of 'Maturity Matching ETF'

KB Asset Management's ‘KBSTAR 23-11 Corporate Bond (AA-) Active ETF’ became the first domestic maturity-matching exchange-traded fund (ETF) to mature and redeem.

On the 23rd, KB Asset Management announced, “The ‘KBSTAR 23-11 Corporate Bond (AA-) Active ETF’ was delisted on the 21st and paid redemption proceeds to investors on this day.” Last November, including the ‘KBSTAR 23-11 Corporate Bond (AA-) Active ETF,’ eight maturity-matching ETFs with fixed maturities were launched for the first time. Currently, 28 domestic maturity-matching ETF products, including financial bonds, government bonds, and special bonds, are being managed, with total net assets reaching 6.35 trillion KRW.

The ‘KBSTAR 23-11 Corporate Bond (AA-) Active ETF’ is the only monthly distribution product among maturity-matching ETFs. Since its launch, it has continuously attracted funds from individual investors, maintaining net assets exceeding 500 billion KRW since February. If an investor bought on the first day of listing and held until maturity, a return of approximately 5.6% per annum (including monthly distributions) is expected. Considering the current one-year interest rate of ‘AA-’ rated corporate bonds is 4.30% per annum, this is an excellent performance.

Geum Jeong-seop, Head of ETF Marketing at KB Asset Management, said, “As the first case of maturity redemption for a domestic maturity-matching ETF, it recorded returns exceeding regular deposit interest rates,” and added, “We will continue to offer alternative products such as other maturity-matching products and money market active ETFs in the future.”

In addition to the matured maturity-matching product, KB Asset Management operates two other maturity-matching ETFs. The ‘KBSTAR 25-03 Corporate Bond (AA-) Active ETF’ has a remaining maturity of 1 year and 4 months, and the ‘KBSTAR 25-11 Corporate Bond (AA-) Active ETF’ has a remaining maturity of 2 years. Both products primarily invest in high-quality domestic corporate bonds rated ‘AA-’ or higher. For the 1-year maturity product, more than 70% is invested in bonds rated ‘AAA’ or higher, and for the 3-year maturity product, more than 60% is invested to enhance stability.

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