TIGER US Ultra-Short-Term Treasury Bond ETF Surpasses 100 Billion Won in Cumulative Net Purchases by Individual Investors

Mirae Asset Global Investments announced on December 10 that the cumulative net purchases by individual investors in the 'TIGER US Ultra-Short-Term (Under 3 Months) Treasury Bond ETF' have surpassed 100 billion won.

According to the Korea Exchange, as of the closing price on December 9, the cumulative net purchases by individual investors in the TIGER US Ultra-Short-Term (Under 3 Months) Treasury Bond ETF amounted to 130.9 billion won. Over the past seven trading days this month, more than 20 billion won in individual funds has flowed in.

The TIGER US Ultra-Short-Term (Under 3 Months) Treasury Bond ETF is the “Korean version of the SGOV ETF,” tracking the same underlying index as BlackRock’s iShares Ultra-Short Treasury Bond (SGOV) ETF, the world’s largest asset manager. It is a monthly dividend ETF that invests in US ultra-short-term Treasury bonds with a remaining maturity of less than three months.

Recently, the combination of a strong global dollar and steady domestic demand for overseas investment has pushed the won-dollar exchange rate above 1,470 won. As a result, demand has increased for safe, short-term dollar asset management options that maintain dollar exposure. The trading volume of the TIGER US Ultra-Short-Term (Under 3 Months) Treasury Bond ETF has been steadily rising, as investors seek to temporarily park proceeds from US stock sales or maintain their dollar asset allocation during periods of rising exchange rates.

Based on its stable investment returns during volatile market conditions, demand for the TIGER US Ultra-Short-Term (Under 3 Months) Treasury Bond ETF has also been increasing. As of the closing price on December 9, the ETF’s underlying index (ICE 0-3 Month US Treasury Securities Index) has recorded positive daily returns since listing. Excluding exchange rate effects, the ETF has consistently delivered stable returns regardless of the investment timing, earning it a reputation as a “parking-type ETF.”

The TIGER US Ultra-Short-Term (Under 3 Months) Treasury Bond ETF can be 100% allocated within retirement pension accounts, offering tax deferral and lower tax rates when used in pension accounts. Unlike overseas-listed ETFs, a 15.4% dividend income tax is imposed on capital gains, which is included in the comprehensive financial income tax base. In the case of overseas-listed ETFs, a 22% capital gains tax is imposed on capital gains.

Kim Dongmyung, Head of Bond ETF Management at Mirae Asset Global Investments, explained, “As public pensions are recently increasing their won exposure, from an overall portfolio perspective, it is now essential for personal pensions (DC, IRP) and individual investors to adopt a risk diversification strategy by expanding their dollar exposure.” He added, “Considering the reduction of currency exchange fees and tax benefits, the TIGER US Ultra-Short-Term (Under 3 Months) Treasury Bond ETF is the most rational option for managing short-term dollar funds.”

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