Hantoo Asset Management ACE KRX Gold Spot ETF Surpasses 100 Billion KRW in Net Assets

The Only Domestic Physical Gold ETF
Individual Investors Net Buy of 24.9 Billion KRW This Year
Gold Preference Rises Amid US Interest Rate Cut Outlook

Korea Investment Trust Management announced on the 5th that the net asset value of ACE KRX Gold Spot ETF, the only domestic gold spot exchange-traded fund (ETF), has surpassed 100 billion KRW.

According to the Korea Exchange, the net asset value of ACE KRX Gold Spot ETF exceeded 100 billion KRW on the 1st, reaching 100.2 billion KRW. As of the previous day, the net asset value was 102.1 billion KRW. This represents a 139.11% increase from 42.7 billion KRW at the end of last year, overwhelmingly surpassing the average net asset value growth rate of 3.81% for domestic listed commodity ETFs during the same period. Launched in December 2021, this product is based on the 'KRX Gold Spot Index' calculated and published by the Korea Exchange. The KRX Gold Spot Index reflects the net return by deducting storage costs from the price return of 1kg gold spot traded on the KRX Gold Market.

Individual investors have net purchased 24.9 billion KRW of this ETF this year, significantly exceeding the average net purchase amount of 2 billion KRW for all commodity ETFs by individuals. This is interpreted as a rise in gold demand driven by the recent surge in U.S. government debt and expectations of a base interest rate cut, which have led to a weaker dollar. As a representative safe-haven asset, gold has an inverse relationship with the U.S. dollar. The return also positively influenced the increase in net asset value. The year-to-date return of ACE KRX Gold Spot ETF is 16.57%, higher than the average of 0.24% for commodity ETFs. The 3-month, 6-month, and 1-year returns are 5.36%, 6.48%, and 15.28%, respectively.

Another feature is that it avoids rollover costs (new futures contracts upon expiration of existing futures contracts). Additionally, it can be invested in through retirement pension accounts such as personal pensions, defined contribution (DC) plans, and individual retirement pensions (IRP). Investing through retirement pension accounts offers tax credit benefits, making it attractive for long-term investment.

Nam Yong-su, Head of ETF Management at Korea Investment Trust Management, said, "Gold prices recently reached their highest level in six months at the end of last month due to expectations that the U.S. Federal Reserve (Fed) will cut base interest rates and a surge in gold demand in China driven by a weakening yuan." He added, "Due to the recent downturn in China's housing market and stock performance, gold, as a defensive asset amid yuan depreciation, is gaining significant attention as a financial investment tool in China."

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