Heungkuk Asset Management Launches First Bond ETF

Comprehensive asset management company Heungkuk Asset Management announced on the 28th that it will list its first bond-type exchange-traded fund (ETF), the "HK Comprehensive Bond (AA- or higher) Active ETF (Bond)."

The newly launched product is an active bond-type ETF that invests in high-quality domestic bonds (AA- or higher). It aims to achieve excess returns compared to the KAP Korea Composite Bond Index (AA- or higher, total return) index.

The index is composed based on more than 5,000 bonds representing the high-quality bond market, including government bonds, monetary stabilization bonds, bank bonds, specialized finance company bonds, corporate bonds, and public corporation bonds. It is calculated as a total return (TR) index reflecting interest income, capital gains or losses, and interest reinvestment income from bond investments. The credit rating of corporate bonds eligible for investment is AA- or higher.

Bond-type products generate interest income by holding bonds until maturity when bond prices fall due to a sharp rise in interest rates. When interest rates fall and bond prices rise, investors can sell bonds before maturity to realize capital gains. Also, as a physical ETF product, 100% of the accumulated funds in retirement pension (DC·IRP) accounts can be invested. Trading ETFs through personal pension and retirement pension accounts defers taxation until the withdrawal point. In particular, individual retirement pensions (IRP) offer tax credit benefits up to 9 million KRW, and pension savings up to 6 million KRW.

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