KB Asset Management Launches 'KBSTAR US 30-Year Treasury Active ETF'

KB Asset Management launched the ‘KBSTAR US 30-Year Treasury Active ETF’ on the 28th.

Following last year’s introduction of the ‘KBSTAR US 30-Year Treasury JPY Exposure ETF’ and the ‘KBSTAR US 30-Year Treasury Covered Call ETF,’ this completes the lineup of three US 30-year Treasury exchange-traded funds (ETFs).

The ‘KBSTAR US 30-Year Treasury Active ETF’ is a monthly dividend product that invests in exchange-traded products (ETPs) based on long-term US government bonds and long-term bonds with an AA+ credit rating issued in the US, providing monthly interest payments. It offers higher stability compared to financial bonds or corporate bonds and aims for higher excess returns compared to the benchmark index composed of US Treasury bonds with a remaining maturity of over 20 years (Bloomberg US Treasury 20+ Year Total Return Index).

The duration is approximately 20 to 21 years, which is 1.3 times longer than the typical US 30-year Treasury duration (about 16 years). When interest rates fall by 1%, the bond price increase is about 4% greater than that of the existing US 30-year Treasury. By utilizing an active strategy, it can seek relatively larger price fluctuations during periods of interest rate cuts.

Designed with a currency exposure strategy, it allows for foreign exchange gains depending on the currency fluctuation cycle. It can save on the increased currency hedging costs due to the recent widening of the benchmark interest rate gap between the US and Korea, and also gain profits when the KRW/USD exchange rate rises.

It is 100% investable through retirement pensions and pension savings accounts, making it convenient to use as a pension product.

Kim Chanyoung, Head of ETF Business Division at KB Asset Management, said, "Recent US employment indicators such as the non-farm payroll and unemployment rate have shown somewhat weak performance, increasing the likelihood of US interest rate cuts in the second half of the year." He added, "By utilizing the ‘KBSTAR US 30-Year Treasury Active ETF,’ which has a duration 1.3 times longer than the existing US 30-year Treasury, investors can expect greater gains when interest rates decline."

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