Samsung Asset Management Launches 3 KODEX Interest Rate-Linked Parking ETFs... "Individual Investors Buy 1 Trillion Won"

Samsung Asset Management announced on the 13th that the cumulative net purchases by individuals of the three KODEX interest rate-linked parking Exchange Traded Funds (ETFs) have exceeded 1 trillion KRW. This record was set just over two years after launching Korea's first parking-type ETF, KODEX KOFR Interest Rate Active, in April 2022.

Samsung Asset Management operates a total of three interest rate-linked parking ETFs: KODEX KOFR Interest Rate Active, KODEX CD Interest Rate Active, and KODEX 1-Year Bank Negotiable Certificate of Deposit (CD)+Active. The cumulative net purchase amounts by individuals are approximately 100.9 billion KRW, 855.6 billion KRW, and 44.5 billion KRW respectively, totaling 1.01 trillion KRW.

KODEX KOFR Interest Rate Active is Korea's first parking-type ETF that tracks the return of the Korea Overnight Financing Rate (KOFR) index, a risk-free benchmark interest rate. Since KOFR reflects the interest rates on overnight government bonds and Monetary Stabilization Bonds collateralized loans, interest income is confirmed and accumulated daily on business days, minimizing the risk of losses due to interest rate fluctuations. In fact, since its launch, it has generated daily returns with zero loss days.

By introducing a short-term institutional product traded at relatively high interest rates as an ETF, it has been highly praised for providing individual investors with a new concept product that allows safe management of short-term funds with high returns. Its net asset size is 5.3 trillion KRW, ranking 4th among all ETFs.

The subsequently launched KODEX CD Interest Rate Active upgraded the existing interest rate-linked parking ETFs, guiding individual investors to actively use ETFs for parking-type investments. It uses the 91-day CD, which generally offers higher interest rates than KOFR, as the underlying asset. Returns are calculated on a daily pro-rata basis on business days and compounded daily, allowing investors to earn the equivalent of one day’s interest on a 91-day CD even if they invest for just one day.

Most notably, considering the ETF’s trading unit of 5 KRW, this product was initially priced at 1 million KRW per share, and large-scale liquidity was supplied to both buy and sell quotes, significantly reducing actual trading costs. As a result, the average daily return of KODEX CD Interest Rate Active since listing is 152 KRW, while daily price fluctuations are only about 5 KRW, allowing investors to trade at nearly fixed prices with low actual trading costs anytime without burden.

As these advantages became known, KODEX CD Interest Rate Active reached a cumulative net purchase by individuals of 855.6 billion KRW within about a year of listing, ranking 7th among all ETFs. Its total net asset size also ranks 1st among all ETFs at 8.81 trillion KRW.

Launched in April this year, KODEX 1-Year Bank Negotiable Certificate of Deposit (CD)+Active is regarded as the ‘ultimate’ interest rate-linked parking ETF. It uses the 1-year CD, which generally offers higher interest rates than the 91-day CD, as the underlying index. Additionally, it applies a differentiated structure for the first time by paying an extra daily return of 0.5% on weekdays if the KOSPI 200 index rises more than 1% in a day, and on the day before holidays, it pays additional returns including the holiday period. Since its listing, this product’s average daily return is the highest among 12 interest rate-linked parking ETFs at 161 KRW.

Im Tae-hyuk, Executive Director of ETF Management at Samsung Asset Management, said, “Since investors are well aware of the advantages and uses of parking ETFs, we expect steady inflows of funds from smart investors, including general stock investors and pension account holders. We will do our best to continue introducing new product structures that can provide more returns to investors, like this year’s ‘KODEX 1-Year Bank Negotiable Certificate of Deposit+Active.’”

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