Mixed Bond ETFs Gain Popularity Amid Volatile Markets

In a market where rallies and declines occur repeatedly, retail investors are turning their attention to bond-mixed exchange traded funds (ETFs) that allocate 50% to stocks and 50% to bonds. This is because, in bull markets, part of the portfolio captures the upward trend, while in bear markets, the bond allocation helps to ease volatility.

According to ETFCheck on August 19, individual investors have continued net buying of recently listed Bond-Mixed 50 ETFs. As of the previous day, over the past week, “PLUS SK hynix SanDisk Bond Mixed 50” recorded individual net purchases of KRW 335 million, “FOCUS Financial Semiconductors Holding Bond Mixed 50 Active” saw KRW 38 million, and “KIWOOM Hyundai Motor Group TOP3 Bond Mixed 50” posted KRW 84 million, among others.

PLUS SK hynix SanDisk Bond Mixed 50 achieved a weekly return of 5.93%, ranking third among all ETFs excluding leverage and inverse products. This demonstrates that bond-mixed ETFs can, to some extent, participate in an upward market. Aside from this ETF, the remaining four among the top five by returns were all semiconductor equipment or insurance-themed equity ETFs.

Bond-mixed ETFs also offer strong downside protection. Hyundai Motor, Kia, and Hyundai Mobis—the components of KIWOOM Hyundai Motor Group TOP3 Bond Mixed 50, which was listed on July 14—showed returns up to August 19 of -6.98%, -8.50%, and +2.05%, respectively. The simple average return was -4.48%. During the same period, KIWOOM Hyundai Motor Group TOP3 Bond Mixed 50 fell by only -2.36%, showing greater resilience in a bear market compared to individual stocks.

A series of new product launches is also in the pipeline. Mirae Asset Global Investments plans to list the “TIGER Samsung Electronics SK hynix US Treasury Mixed 50” ETF on August 25. This ETF allocates 25% each to Samsung Electronics and SK hynix, and the remaining 50% to US short-term bonds. By combining leading domestic semiconductor stocks with US short-term bonds, the product offers asset diversification across stocks and bonds, as well as currency diversification through won and dollar holdings. Korea Investment Management is preparing to list the “ACE Samsung Electronics SK hynix Plus Bond Mixed 50” ETF. This ETF invests 50% in domestic stocks and 50% in bonds, with Samsung Electronics and SK hynix as its core holdings, and one additional stock selected as the top “AI semiconductor” pick based on keyword analysis, for a total investment in three companies.

Bond Mixed 50 ETFs are also being used as tools to increase allocations to stocks in retirement accounts. These ETFs are classified as safe assets in retirement pension DC and IRP accounts, allowing investors to allocate up to 100% without any limitations. As a result, if an investor fills the 70% risk asset limit with equity ETFs and allocates the remaining 30% to Bond Mixed 50 ETFs, the effective stock investment ratio can be expanded up to 85%.

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