KB Securities, Brokerage ISA Bond Customers Showed High Proportion of Government Bond Purchases

KB Securities announced on the 10th that an analysis of bond investment status among its brokerage-type ISA customers showed that the highest purchase proportion was for government bonds.

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When examining bonds purchased through brokerage-type ISA accounts by type, the investment proportion in government bonds was the highest at 63%. It is understood that individual investors' funds flowed mainly into government bonds due to increased market uncertainty following the recent bankruptcy of Silicon Valley Bank (SVB). KB Securities opened a bond trading service for brokerage-type ISA subscribers for the first time in the industry at the end of February this year, and compiled data for one month from the service launch date of February 28 to the end of March.

Investors expecting relatively higher profitability purchased corporate bonds (22%) and special bonds (13%). When the purchase proportions of corporate bonds and special bonds were further broken down by credit rating, it was found that about 67% of investments were in credit ratings between ‘AA-’ and ‘AA0’.

The average bond purchase amount through brokerage-type ISA accounts was 11.46 million KRW. Considering the annual deposit limit of 20 million KRW for ISA accounts, it is estimated that the proportion invested in bonds was high.

Looking at bond investment customers through brokerage-type ISA accounts by age group, customers aged 60 and above had the highest average bond purchase amount per person at 19.11 million KRW. Additionally, solid purchase demand was seen among middle-aged groups in their 40s (average 9.44 million KRW per person) and 50s (average 12.79 million KRW per person), as well as purchase demand from those in their 20s (average 7 million KRW per person) and 30s (average 6.47 million KRW per person).

Lee Min-hwang, Head of the Asset Management Solutions Center at KB Securities, said, “In the past, individual investors’ bond investments were predominantly for stable investment product management by high-net-worth individuals, but today’s bond investments through brokerage-type ISA accounts cover various investment purposes ranging from stable retirement fund management to liquidity fund deposits and lump-sum savings.” He added, “We plan to provide customers with a wider range of choices through diversification of the retail bond lineup, including interest rates, maturities, and credit ratings.”

Meanwhile, the company offers brokerage-type ISA exclusive stock coupons (up to 200,000 KRW) based on the net purchase amount of Korean won over-the-counter bonds in brokerage-type ISA accounts. If the balance is maintained until the end of August after depositing into the brokerage-type ISA account, additional stock coupons worth up to 200,000 KRW will be provided according to the net deposit amount.

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