Hanwha Asset Management Launches New 'Parking-Type ETF' ARIRANG Money Market Active ETF

Hanwha Asset Management listed the ‘ARIRANG Money Market Active Exchange-Traded Fund (ETF)’ on the Korea Exchange on the 26th. It is a ‘parking-type ETF’ that invests in ultra-short-term bonds with a remaining maturity of up to 90 days or less, aiming for stable interest income.

The ARIRANG Money Market Active ETF is an ultra-short-term bond-type ETF composed of Korean won bonds with a remaining maturity within 3 months, corporate commercial paper/promissory notes rated A1 or higher, KOFR, Call, and others. The benchmark index is the 'KAP Market Value MMF Index (Total Return)', and the total expense ratio is 0.05%.

This ETF is a bond-type product that restructures MMF (Money Market Fund), a representative ultra-short-term financial product, into an ETF. Unlike existing MMFs, it is subject to relaxed financial regulations regarding asset inclusion and liquidity ratios, allowing for greater operational autonomy. The expected annualized return is around 4%.

As the timing of interest rate cuts was delayed beyond market expectations, domestic MMF funds reached approximately KRW 212.4175 trillion as of the 15th, an increase of about KRW 43 trillion (25%) compared to KRW 169.8309 trillion at the end of last year. This is analyzed as an increase in cash holdings rather than investment in risk assets due to the maintenance of a high interest rate environment.

Unlike existing MMFs, the ARIRANG Money Market Active ETF is traded on the Korea Exchange, allowing for rapid response to market volatility. Additionally, while regular time deposits in the market require a certain period to elapse to receive the agreed interest in full, the ARIRANG Money Market Active ETF offers an expected annualized return of around 4% even with just one day of investment.

Yoon Joon-gil, head of the ETF Management Team at Hanwha Asset Management, said, “As the U.S. Federal Reserve maintains a cautious stance based on inflation data, it is important to secure sufficient liquidity rather than hastily predicting the timing of interest rate cuts for investment.” He added, “The ARIRANG Money Market Active ETF is an attractive investment destination not only because of its liquidity but also because it offers higher expected returns compared to regular time deposits and CD rate ETFs in the market.”

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