Hantoo Asset Management Simultaneously Lists 3 Maturity Auto-Renewal Bond ETFs

Korea Investment Trust Management announced on the 22nd that it will simultaneously list three maturity auto-extension bond-type exchange-traded funds (ETFs) on the 23rd. The three ETFs are ACE February Maturity Auto-Extension Corporate Bond AA- or Higher Active, ACE May Maturity Auto-Extension Corporate Bond AA- or Higher Active, and ACE August Maturity Auto-Extension Corporate Bond AA- or Higher Active.

The three newly listed ETFs are the same type of product as the 'ACE November Maturity Auto-Extension Corporate Bond AA- or Higher Active ETF,' which Korea Investment Trust Management first listed domestically in December last year. Each ETF mainly invests in bonds maturing in February, May, and August annually, respectively, and automatically replaces the portfolio with bonds maturing the following year when the invested assets reach maturity. Portfolio changes occur around five business days before and after each maturity date (February, May, August).

The underlying indices for the ACE February Maturity Auto-Extension Corporate Bond AA- or Higher Active ETF and the ACE August Maturity Auto-Extension Corporate Bond AA- or Higher Active ETF are the 'KAP February Maturity Auto-Extension Corporate Bond (AA- or Higher) Total Return Index (hereinafter KAP February)' and the 'KAP August Maturity Auto-Extension Corporate Bond (AA- or Higher) Total Return Index (hereinafter KAP August),' respectively, calculated and announced by Korea Asset Valuation. The underlying index for the ACE May Maturity Auto-Extension Corporate Bond AA- or Higher Active ETF is the 'KIS May Maturity Auto-Extension Corporate Bond (AA- or Higher) Total Return Index (hereinafter KIS May),' calculated and announced by KIS Asset Valuation.

The three benchmark indices each construct investment portfolios consisting of special bonds, bank bonds, other financial bonds, and corporate bonds with a credit rating of AA- or higher and an issuance balance of 50 billion KRW or more, maturing between January and March (KAP February), April and June (KIS May), and July and September (KAP August) annually. Accordingly, the three newly listed ETFs also include special bonds, bank bonds, other financial bonds, and corporate bonds with a credit rating of AA- or higher. According to NICE Credit Rating, the average cumulative default rate of AA-rated bonds has been 0% from 1998 to the present, with no defaults recorded.

Nam Yong-su, Head of ETF Management at Korea Investment Trust Management, said, "Following the ACE November Maturity Auto-Extension Corporate Bond AA- or Higher Active ETF listed in December last year, three ETFs incorporating February, May, and August maturities will be newly listed." He added, "From an investor's perspective, this means they can choose products that include bonds maturing at their desired quarterly periods."

He continued, "Unlike existing maturity bond-type ETFs, the advantage is that investors can automatically reinvest in the same manner at maturity, reducing their inconvenience," and explained, "It will be a good investment tool for investors with a stable investment tendency or those in the pension withdrawal phase after retirement."

Meanwhile, all four ETFs mentioned in the article are performance dividend-type products, and principal loss may occur depending on management results. Additionally, it should be noted that the past default rates of the bonds mentioned may not necessarily apply in the future.

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