Shinhan Asset Management Launches New Shinhan US Long-Term Bond Plus Fund

Shinhan Asset Management announced on the 30th the launch of the ‘Shinhan US Long-Term Bond Plus Fund’.

The Shinhan US Long-Term Bond Plus Fund invests in US long-term Treasury bonds and US Treasury bonds (ETFs) with a remaining maturity of around 15 years to secure stable interest income while pursuing relatively high capital gains when interest rates decline. The portfolio consists of more than 70% US long-term Treasury bonds and US Treasury bond exchange-traded funds (ETFs). Additionally, it utilizes US corporate bonds and short-term liquidity products to adjust weights according to market conditions to secure additional returns.

This fund is characterized by direct physical investment in US long-term Treasury bonds, reducing management fees and transaction costs. As of the 15th, the fund’s expected annualized yield to maturity (YTM) is 4.47%. The duration is around 15 years. It is currently available for subscription through Shinhan Investment Corp., Samsung Securities, Korea Investment & Securities, Kiwoom Securities, and from September, sales will expand to include Gwangju Bank and Woori Investment & Securities.

With Federal Reserve Chairman Jerome Powell hinting at a rate cut in September, market interest in US bond assets is increasing. Especially during rate cut periods, long-term bonds are expected to outperform medium- to short-term bonds. Since 1974, during 11 rate cut cycles, US long-term Treasury bonds recorded an average annual return of 14.1%, outperforming medium- to short-term bonds (11.5%). Furthermore, in situations like the recent one where rate cuts are expected without a recession, US corporate bond investments have also shown excellent performance.

Kang Pan-seok, head of the overseas bond management team at Shinhan Asset Management, said, “With the anticipated US rate cuts, the Shinhan US Long-Term Bond Plus Fund, which offers stable income and capital gains, is a must-have product in portfolios,” adding, “The Shinhan US Long-Term Bond Plus Fund, which diversifies investments in US long-term Treasury bonds and high-quality corporate bonds, will be an effective investment solution for investors who are usually unfamiliar with investing in the US bond market.”

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