Parking-type ETFs Popular Amid High Interest Rates... "Choosing Top Performers Is Advantageous"

"Even with One Day Investment, Annual Returns Around 3-4%"
KBSTAR Money Market Active ETF Leading the Way

Due to global stock market instability and the continued high interest rate environment, investors are increasingly turning to ultra-short-term exchange-traded fund (ETF) products, so-called ‘parking-type ETFs.’ The financial investment industry suggests that among the numerous parking-type ETFs, investors should carefully select the ‘top performers’ with relatively superior returns.

According to the financial investment industry on the 30th, currently, 10 types of parking-type ETFs, including negotiable certificates of deposit (CD) rates, Korea Overnight Financing Rate (KOFR), and money market products, are listed domestically. The total net assets of these ETFs reached approximately KRW 25.446 trillion as of the 26th of this month. This is an increase of KRW 14.1386 trillion compared to six months ago.

Looking at the recent performance of the 10 domestic parking-type products, KB Asset Management’s ‘KBSTAR Money Market Active ETF’ is leading. It ranks first in both 3-month (1.19%) and 6-month (2.24%) returns. The annualized return exceeds 4.0%.

The ‘KBSTAR Money Market Active ETF’ is a product implemented as an ETF that allows individuals to invest in a portfolio equivalent to a corporate-type mark-to-market money market fund (MMF). It invests in ultra-short-term bonds within three months and pursues an aggressive excess return strategy, achieving relatively superior performance even within the same category.

Parking-type ETFs serve as both investment standby funds and products seeking short-term profits, effectively playing the same role as parking accounts. In the past, institutions mainly used them as short-term investment destinations, but recently, they have also gained popularity among individual investors amid increased market volatility.

This is due to their high liquidity. Bank fixed deposits require the agreed period to be completed to receive all interest. However, parking-type ETFs can yield annual returns of around 3-4% even with just one day of investment. Without a fixed term, investors can withdraw funds anytime they wish.

Yook Dong-hwi, Head of ETF Marketing at KB Asset Management, explained, “The KBSTAR Money Market Active ETF has grown to a net asset size of about KRW 1.5 trillion, surpassing KRW 15 billion in net purchases by individuals this year alone,” adding, “This is the result of increased demand from individual and institutional investors who carefully compare returns and trade even with short-term funds.”

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