KB Asset Management Launches '1-Year Maturity Matching ETF'

KB Asset Management has launched its fourth maturity-matching bond exchange-traded fund (ETF).

Launched on the 18th, the ‘KBSTAR 25-06 Eunhaengchae (AA+ or higher) Active ETF’ is an ETF that diversifies investment in domestic bank bonds with a credit rating of ‘AA+’ or higher, maturing in June 2025.

As of the launch date, the expected yield to maturity (before fees) is approximately 3.57% per annum. Given the recently increased interest rate environment, performance exceeding that of regular deposits is anticipated.

Unlike traditional bond ETFs, maturity bond ETFs have a fixed maturity date for each product. Even if interest rates rise, holding until maturity can yield the initially expected performance (yield to maturity at the time of investment), and conversely, if interest rates fall, capital gains can be realized through trading.

KB Asset Management was the first in the industry to conduct maturity redemption of a maturity-matching ETF in November last year. The ‘KBSTAR 23-11 Hoesachae (AA- or higher) Active ETF’, which was listed at 50,146 KRW, achieved a return of about 5.6% by combining monthly dividends (totaling 825 KRW) and maturity redemption payments (totaling 52,126 KRW).

Kim Chanyoung, Head of ETF Business Division at KB Asset Management, explained, “If maturity bond ETFs are held until maturity, investors can obtain expected returns regardless of market interest rate fluctuations, and there is the advantage of being able to sell during the investment period. If invested through Individual Retirement Pension (IRP), Defined Contribution (DC) pension accounts, or pension savings accounts, tax benefits can also be expected.”

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