'SOL Jungdanggi Hoesae Actibeu' Net Assets Surpass 100 Billion Won

Published 03 Apr.2025 08:55(KST)

Shinhan Asset Management's parking-type ETF 'SOL Short- to Medium-Term Corporate Bonds (A- or higher) Active,' launched in response to the declining interest rate environment, has surpassed 100 billion KRW in net assets. This is attributed to increased cash parking demand from individual investors driven by performance competitiveness, along with growing replacement demand from institutional investors as short-term interest rates fall amid expectations of a US base rate cut.

The current expected maturity yield to maturity (YTM) of the SOL Short- to Medium-Term Corporate Bonds (A- or higher) Active ETF stands at approximately 3.42% annually, demonstrating superior performance competitiveness compared to the KOFR (Korea Overnight Financing Rate) and 91-day CD rates, which are formed around 2.7-2.8%.

The SOL Short- to Medium-Term Corporate Bonds (A- or higher) Active ETF selectively invests in credit bonds such as corporate bonds and other financial bonds with a remaining maturity of within three years. Through duration management of around 1.6 years, it seeks excess returns over market interest rates by maximizing capital gains from interest rate fluctuations, making it a short-term fund parking-type ETF.

With a favorable environment for bond investment due to expectations of interest rate cuts, investors can pursue stable interest income and capital gains from declining interest rates through investment in high-quality corporate bonds.

Huh Ik-seo, Head of the Bond ETF Management Team at Shinhan Asset Management, explained, "Due to domestic political instability, sluggish consumption, and the potential impact of US tariff impositions, the likelihood of an economic slowdown has increased, leading to expectations of further base rate cuts by the Bank of Korea." He added, "Market interest rates are also expected to gradually decline," and noted, "Meanwhile, the credit market continues to show stable trends despite incidents such as the Homeplus case."

Furthermore, he stated, "The SOL Short- to Medium-Term Corporate Bonds (A- or higher) Active ETF will be actively managed to maintain performance competitiveness by selectively incorporating credit bonds within investment-grade ratings and adjusting duration in line with the domestic monetary policy transition period."

Since the SOL Short- to Medium-Term Corporate Bonds (A- or higher) Active ETF is classified as a safe asset, it allows for 100% investment of accumulated funds in retirement pension (DC/IRP) accounts. It is also highly useful in ISA (Individual Savings Account) with tax benefits. Investors can freely buy and sell at any time. There is no need to deposit funds for a long period; investors can receive interest income for the desired period and sell when funds are needed. This offers the advantage of flexible management of surplus funds.