Korea Investment Management's ACE U.S. 10-Year Treasury Active ETF Sees Individual Net Purchases Top KRW 50 Billion Over Six Months

Korea Investment Management's ACE U.S. 10-Year Treasury Active exchange-traded fund (ETF) has seen a sharp inflow of funds, with individual investors' net purchases exceeding KRW 50 billion over the past six months.

On November 11, Korea Investment Management said individual investors' cumulative net purchases of the ACE U.S. 10-Year Treasury Active ETF over the past six months totaled KRW 50.3 billion as of the previous day. Its net assets stood at KRW 193.5 billion, and individual investors recorded net purchases on all but two trading days since September 9.

Listed in July 2025, the ACE U.S. 10-Year Treasury Active ETF tracks the price of U.S. 10-year Treasury bonds. It seeks to outperform the KRW-converted version of the ICE U.S. Treasury 7-10 Year Bond Index (Total Return), which comprises U.S. Treasury securities issued by the U.S. Department of the Treasury with remaining maturities of more than seven years and up to 10 years.

Recent net buying by individual investors is believed to reflect demand for bargain purchases following a sharp decline in bond prices amid a surge in long-term U.S. interest rates. The company said investors appear to believe the ETF can provide interest income with lower price volatility than 30-year Treasury bonds, while also offering the potential for capital gains from rising bond prices if interest rates fall in the future.

The ETF's duration (weighted average remaining maturity) is about 6.7 years, limiting price fluctuations in response to interest-rate changes compared with the ACE U.S. 30-Year Treasury Active ETF, whose duration is 15.01 years. The company said the ETF can be used by investors seeking to reduce exposure to interest-rate volatility while pursuing interest income from U.S. Treasury bonds and capital gains if market interest rates decline.

Regular monthly cash flow is another advantage. The ETF has a monthly distribution structure, and its distribution rate over the past year was 3.93%, according to ETF Check.

Choi Eunyoung, senior manager of Korea Investment Management's Overseas FI Management Department, said, "The ACE U.S. 10-Year Treasury Active ETF is a product for investors who are concerned about the price volatility of 30-year Treasury bonds but want to invest in U.S. Treasury bonds and receive monthly cash flow. We offer a diverse range of U.S. Treasury investment products so investors can choose maturities and whether to hedge currency risk in line with their investment objectives and outlook for interest rates and exchange rates."

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