Korea Investment Management's ACE Money Market Active ETF Surpasses 1 Trillion Won in Net Assets

Thanks to inflows from short-term parking funds and idle funds in pension accounts, the ultra-short-term bond-type exchange-traded fund (ETF) managed by Korea Investment Management has surpassed 1 trillion won in net assets in just about two years since its listing.

On the 28th, Korea Investment Management announced that the net asset value of the ACE Money Market Active ETF has exceeded 1 trillion won.

According to the Korea Exchange, as of the previous trading day (the 23rd), the net asset value of the ACE Money Market Active ETF was 1.1849 trillion won.

This product, which was listed in July 2024, calculates and applies, on a compounded basis, interest rates derived from ultra-short-term bonds such as certificates of deposit (CDs) and Korea Overnight Financing Rate (KOFR). The ETF incorporates bonds with a remaining maturity of less than three months and a credit rating of AA or higher, as well as commercial papers—including short-term corporate bonds—and CDs. As a result, it serves as an effective investment tool for managing short-term or idle funds within pension accounts.

The ACE Money Market Active ETF has seen steady capital inflows since the beginning of the year. So far this year alone, it has attracted 701.8 billion won, significantly exceeding the average of 258.6 billion won for the 13 money-market bond-type active ETFs listed in Korea (excluding those newly listed in September). Notably, in just the past month, it saw inflows amounting to as much as 297.7 billion won, further boosting its scale.

A higher yield to maturity (YTM) compared to the 91-day CD rate (3.21%) is cited as a major advantage of the ACE Money Market Active ETF. YTM refers to the weighted average of the expected annual returns of the bonds included in the ETF, allowing investors to estimate annualized returns at the time of investment. The ACE ETF announces the previous day's YTM daily on its product description page, and as of the 23rd, the annualized YTM for the ACE Money Market Active ETF is 3.74%. This annualized YTM of 3.74% surpasses the average of 3.57% for the 13 money-market bond-type active ETFs listed in Korea.

Jo Ikhwan, Head of the FI Investment Division 1 at Korea Investment Management, stated, "The ACE Money Market Active ETF is an ultra-short-term bond product with a duration of around 0.13 years, featuring low sensitivity to interest rate volatility. In periods like now, where risks related to interest rate and stock price volatility are high, incorporating short-term cash products such as the ACE Money Market Active ETF into portfolios can be an effective strategy to reduce volatility."

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