Korea Investment US Long-Term Treasury Bond Fund Surpasses 40 Billion KRW in Personal Funds

Korea Investment Management announced on the 24th that individual investor funds flowing into the ‘Korea Investment U.S. Long-Term Treasury Bond Fund’ series have surpassed 40 billion KRW.

According to FnGuide, individual funds flowing into the Korea Investment U.S. Long-Term Treasury Bond Fund series amounted to 42.5 billion KRW. As of the 17th, the amount recorded was 32.5 billion KRW, surpassing 30 billion KRW, and an additional 10 billion KRW flowed in within just four trading days.

Recently, as U.S. economic indicators showed a slowdown in inflation, raising expectations that the benchmark interest rate cut is within sight, individual investor interest in the Korea Investment U.S. Long-Term Treasury Bond Fund has increased.

The U.S. Consumer Price Index (CPI) for April, announced on the 15th (local time), rose 3.4% year-on-year. This figure decreased by 0.1 percentage points compared to the previous month, marking the first easing of inflation this year. Bloomberg reported that large institutions investing in U.S. bonds are rapidly increasing their capital allocation to long-term bonds amid expectations that the benchmark interest rate will eventually be lowered. In fact, from the 16th to the 23rd, the week following the CPI announcement, individual investors added 16.4 billion KRW more to the Korea Investment U.S. Long-Term Treasury Bond Fund.

The Korea Investment U.S. Long-Term Treasury Bond Fund, launched by Korea Investment Management in April, is the first purely U.S. bond-composed fund in Korea. Its concentrated investment targets are U.S. long-term Treasury bond spot assets and exchange-traded funds (ETFs) investing in U.S. long-term Treasury bond spot assets. The fund portfolio includes approximately 30% of U.S. long-term Treasury bond spot assets with a remaining maturity of 24 years and duration over 15 years, and about 70% of U.S.-listed U.S. long-term Treasury bond ETFs. Some residual liquidity (U.S. dollar cash) is also used in dollar money market funds (MMFs) to pursue continuous interest income.

The fund’s performance has also been excellent. Since its launch last month, the fund’s one-month return recorded 2.36%. Long-term bond prices have an inverse correlation with benchmark interest rates, so if the U.S. lowers the benchmark interest rate in the future, the yield will increase.

Another feature of the Korea Investment U.S. Long-Term Treasury Bond Fund is its shorter redemption cycle compared to funds of the same type (overseas bond type). Most overseas bond-type funds have a redemption cycle of 9 business days, but this product applies the standard price from 4 business days after the redemption application date, allowing redemption proceeds to be received on the 6th business day.

Seoyongtae, head of the Global Strategy Management Department at Korea Investment Management and the fund’s responsible manager, explained, “The Korea Investment U.S. Long-Term Treasury Bond Fund, Korea’s first pure U.S. long-term bond fund, was launched to continue Korea Investment Management’s direction of ‘customer value orientation.’ The strength of this fund is that it allows investors to earn interest income until the interest rate cut and realize capital gains during the interest rate cut period.”

The Korea Investment U.S. Long-Term Treasury Bond Fund is a performance-distributing product, and past returns do not guarantee future performance. Principal loss may occur depending on management results.

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