Kiwoom Asset Management Invests in US Long-Term Treasury Bonds Alongside Palantir and Nvidia

Launch of Two Single-Stock Bond Mixed ETFs
KIWOOM Palantir / Nvidia US 30-Year Treasury Mixed Active (H) ETFs

Kiwoom Asset Management announced on the 6th that it will launch the ‘KIWOOM Palantir US 30-Year Treasury Mixed Active (H)’ and ‘KIWOOM Nvidia US 30-Year Treasury Mixed Active (H)’ exchange-traded funds (ETFs) on the 11th.

These are ‘single-stock bond mixed ETFs’ that invest simultaneously in one stock and bonds. They invest in either Palantir or Nvidia stock along with US 30-year Treasury bonds. Amid ongoing investments by domestic investors in US stocks and long-term US bonds, this is the first product to invest simultaneously in US stocks and US 30-year long-term Treasury bonds.

By utilizing ‘KIWOOM Palantir US 30-Year Treasury Mixed Active (H)’ and ‘KIWOOM Nvidia US 30-Year Treasury Mixed Active (H)’, investors can efficiently pursue the growth of the AI industry and benefits from US interest rate cuts together. Through currency hedging (H), the impact of fluctuations in the KRW-USD exchange rate on ETF performance is minimized. Investors can invest in interest rate cuts without concerns about dollar volatility.

The ETFs use the ‘Bloomberg Blended PALANTIR/NVIDIA and US Long Treasury Bond Index’, which reflects Palantir or Nvidia stock prices and US 30-year Treasury bond prices in a 3:7 ratio, as the benchmark index. This index is expected to have a similar effect to investing 30% in Palantir or Nvidia, which lead the artificial intelligence (AI) industry, and 70% in US ultra-long-term Treasury bonds that yield higher returns than short-term bonds during interest rate cut phases. As active ETFs, they aim to maintain a correlation coefficient of 0.7 or higher with the benchmark index while pursuing higher performance compared to the benchmark.

There is ongoing interest in major companies that make up the AI value chain, as AI is expected to remain a key theme in the global stock market this year. Palantir is recognized as a leading company in the AI software sector. It is a software company that analyzes vast amounts of data with AI and helps establish strategies tailored to specific purposes. Its clients include US national agencies such as the Central Intelligence Agency (CIA) and the Federal Bureau of Investigation (FBI), as well as private companies. It spans both AI service and defense themes, earning it the nickname ‘AI defense stock’.

Palantir’s investment value is receiving significant attention. As demand from companies adopting AI software increases, military use of AI is expected to become more active under the administration of former US President Donald Trump. Palantir’s stock surged after it announced earnings forecasts on the 3rd (local time) that exceeded market expectations. Since its listing in 2020, Palantir’s market capitalization has already surpassed that of Lockheed Martin, the world’s largest defense company.

Nvidia, the leading AI semiconductor stock at the core of the AI value chain, is regarded as the biggest beneficiary of the expansion of the AI ecosystem. With continued large-scale data center investments by big tech companies and the evolution of AI models from training to inference, demand for high-performance graphics processing units (GPUs) remains strong. It is also expected that Nvidia will be the primary beneficiary of the ‘Stargate’ mega AI infrastructure investment project promoted by former President Trump.

The US 30-year Treasury bond, issued with a 30-year maturity, is synonymous with US long-term bonds. Since bonds with longer maturities are more sensitive to interest rates, long-term bonds can expect significant price increases during interest rate cut phases. As the US interest rate cut cycle arrives, domestic investors’ investments in US long-term bonds have also increased unprecedentedly.

‘KIWOOM Palantir US 30-Year Treasury Mixed Active (H)’ and ‘KIWOOM Nvidia US 30-Year Treasury Mixed Active (H)’ have particularly high value for use in retirement pensions. They are useful for aggressive pension investors who seek to maximize stock allocation in retirement pension accounts for active asset growth.

Under current regulations, the proportion of risky assets (equity or equity-mixed types) in retirement pension accounts is limited to a maximum of 70%. This means that at least 30% of the funds must be invested in non-risk assets (bond or bond-mixed types). By using these two ETFs, investors can hold a high proportion of stocks even within this 30% range, effectively increasing the actual stock investment ratio in retirement pensions. It is also possible to invest 100% of retirement pension funds in these ETFs.

A representative from Kiwoom Asset Management said, “Many investors struggle to find products to include in the minimum 30% non-risk asset portion when using ETFs for retirement pension investments.” He added, “This new product, which mixes Palantir or Nvidia with US 30-year Treasury bonds, allows concentrated investment in high-growth single stocks while also pursuing benefits from interest rate cuts. It will be an optimal alternative for retirement pension investors seeking active asset growth.”

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