Published 08 Mar.2024 11:00(KST)
Mirae Asset Global Investments announced on the 8th that the 'TIGER 1-Year Bank Negotiable Certificate of Deposit Active (Synthetic) ETF' recently recorded the highest return among KRW-based interest rate ETFs over the past month.
According to the Korea Exchange, the 'TIGER 1-Year Bank Negotiable Certificate of Deposit Active (Synthetic) ETF' posted a 1-month return (NAV, annualized basis) of 3.67% from its listing date on the 6th of last month to the 6th of this month. During this period, it achieved the highest return among KRW-based interest rate ETFs listed domestically, including CD 91-day instruments and KOFR (Korea Overnight Financing Rate).
The TIGER 1-Year Bank Negotiable Certificate of Deposit Active (Synthetic) ETF is the first domestic interest rate ETF that tracks the 1-year CD (Negotiable Certificate of Deposit) rate. It calculates the 1-year CD rate on a daily basis and compounds it daily, allowing investors to earn the 1-year CD daily rate even if they invest for just one day without any period or condition restrictions. As of the 6th, the 1-year CD rate stands at 3.64%, which is on average 0.28 percentage points higher than the 91-day CD rate over the past three years, due to tracking a longer maturity rate. Compared to KOFR during the same period, it is on average 0.48 percentage points higher.
Due to its high expected returns, buying interest in the ‘TIGER 1-Year Bank Negotiable Certificate of Deposit Active (Synthetic) ETF’ is also strengthening. On its listing day, the 6th of last month, the ETF recorded 23.2 billion KRW in net purchases by individual investors, ranking first in net individual purchases on the listing day among all bond and interest rate ETFs. Subsequently, individual investor buying continued, surpassing 100 billion KRW in just 9 trading days. As of the 6th, its net asset size exceeded 420 billion KRW.
The TIGER 1-Year Bank Negotiable Certificate of Deposit Active (Synthetic) ETF offers returns comparable to bank fixed deposits while attracting standby funds due to its high liquidity. Unlike fixed deposits, which require early withdrawal fees if terminated before maturity, ETFs can be freely traded at any time.
Recently, investment in the TIGER 1-Year Bank Negotiable Certificate of Deposit Active (Synthetic) ETF through Individual Savings Accounts (ISA) has also gained attention. ISA is an account that allows integrated management of various financial products and comes in three types: discretionary, trust, and brokerage. In the brokerage type, where fixed deposit investments are not possible, using the ‘TIGER 1-Year Bank Negotiable Certificate of Deposit Active (Synthetic) ETF’ can provide a stable way to accumulate a lump sum similar to deposits. With the Financial Services Commission announcing plans to expand ISA contribution and tax exemption limits, the actual investment returns through ISA accounts are expected to increase further.
Kim Nam-gi, Vice President and Head of ETF Management at Mirae Asset Global Investments, said, "The ‘TIGER 1-Year Bank Negotiable Certificate of Deposit ETF’ is designed to pursue higher returns than existing interest rate ETFs listed domestically," adding, "We plan to continue managing it to provide the highest possible interest rates."
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