Hantoo Asset Management "Long-term Bond ETFs... Continued Net Buying by Individuals"

Net Purchase Amount Totals 10.6 Billion KRW

Korea Investment Trust Management announced on the 9th that the net buying trend of individual investors toward the ACE US 30-Year Treasury Active (H) Exchange-Traded Fund (ETF) continues into the new year of 2024.

According to the Korea Exchange, since the market opened on the 2nd, the net purchase amount by individual investors flowing into the ACE US 30-Year Treasury Active (H) ETF was 10.6 billion KRW (as of the 8th). This ranks first in net buying among 129 bond-type ETFs listed on the KOSPI market and seventh among all ETFs (excluding leveraged and inverse products).

The ACE US 30-Year Treasury Active (H) ETF is a physical US long-term bond ETF first introduced domestically by Korea Investment Trust Management in March last year. Its benchmark index is the Bloomberg US Treasury 20+ Year Total Return Index, and it features bonds with a remaining maturity of 20 years or more among US-issued 30-year Treasury bonds.

The ACE US 30-Year Treasury Active (H) ETF also has the advantage of being a monthly dividend product. Investors can enjoy capital gains on bonds when interest rates fall, as well as receive monthly distributions based on bond interest income. Monthly dividend ETFs, which first appeared on the KOSPI market in June 2022, have gained popularity for their ability to generate monthly income, increasing to 41 products by the end of last year.

As individual investors continue net buying, the size of the ACE US 30-Year Treasury Active (H) ETF is also showing growth. The current net asset value of the ACE US 30-Year Treasury Active (H) ETF is 631.6 billion KRW. It took less than two months to surpass 600 billion KRW after breaking through 500 billion KRW at the end of November last year. Notably, from July 21 to December 15 last year, over 100 trading days, net buying by individual investors occurred on all but one trading day. The net purchase amount during this period reached 190.9 billion KRW.

Nam Yong-su, Head of ETF Management at Korea Investment Trust Management, stated, "Capital inflows into the ACE US 30-Year Treasury Active (H) ETF are expected to continue until the end of the interest rate cuts." He added, "The ACE US 30-Year Treasury Active (H) ETF invests 100% in physical US long-term bonds within retirement pension accounts and secures monthly distribution funds based on bond interest income, making it more stable compared to equity-type monthly dividend ETFs."

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