ACE CD Rate & Ultra-Short-Term Bond Active ETF to Be Renamed ACE Money Market Active ETF

Korea Investment Management announced on May 26 that the ACE CD Rate & Ultra-Short-Term Bond Active Exchange-Traded Fund (ETF) will change its name to ACE Money Market Active ETF on May 30.

The ACE CD Rate & Ultra-Short-Term Bond Active ETF is a parking-type ETF launched by Korea Investment Management last year. Parking-type ETFs are products that apply interest rates from ultra-short-term bonds such as negotiable certificates of deposit (CDs) or Korea Overnight Financing Repo Rate (KOFR) on a daily basis and compound the interest. These ETFs are highly useful for managing idle funds in short-term cash or pension accounts.

The name change was made to clearly reflect the investment strategy. The assets included in the ACE CD Rate & Ultra-Short-Term Bond Active ETF are bonds with a remaining maturity of three months or less and a credit rating of AA or higher, commercial papers including short-term corporate bonds, and CDs. By focusing investments on short-term financial products, the fund adopts a money market fund (MMF) management strategy that reflects short-term interest rate fluctuations in fund returns. The benchmark index has also been changed from the 'MK-KAP CD Rate & Ultra-Short-Term Bond Total Return Index' to the 'MK-KAP Money Market Total Return Index' to enhance clarity.

The portfolio management remains unchanged. The portfolio is composed of 70% short-term bonds and commercial papers, 20% CDs, and 10% cash-equivalent assets. The strategy of selecting higher-yielding securities within the same credit rating and seeking excess returns compared to the 91-day CD rate is also maintained. As of the previous business day (May 23), the 91-day CD rate was 2.67%, while the ETF's yield to maturity (YTM) as of May 23 was recorded at 2.88%. The duration is 0.16 years.

Kim Dongju, Head of FI Management Division 1 at Korea Investment Management and responsible fund manager, stated, "Many investors are struggling to choose investment destinations as market volatility continues," adding, "Parking-type ETFs can be a good alternative, as they allow investors to earn interest income even for a single day of investment and offer liquidity without a mandatory holding period."

He added, "The ACE CD Rate & Ultra-Short-Term Bond Active ETF, which will change its name to 'ACE Money Market Active' at the end of this month, invests in undervalued securities with higher interest income within the same credit rating to maximize YTM. It is a good product not only for managing short-term funds but also for portfolio investment in defined contribution (DC) retirement pensions or individual retirement pension (IRP) accounts."

The ACE CD Rate & Ultra-Short-Term Bond Active ETF is a performance-based product, and principal loss may occur depending on investment results.

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