Korea Investment Trust Management announced on the 17th that it will newly list the ACE FTSE WGBI Korea Exchange-Traded Fund (ETF).
The ACE FTSE WGBI Korea ETF, which will be listed the next day, is a bond ETF that allows for diversified investment in various Korean government bonds. It includes 63 excellent government bonds with a total issuance of over 1 trillion won, which possess revenue and stability, and the expected duration is about 10 years. The underlying index is the FTSE Korean Government Bond Index (Total Return), which is calculated and published by FTSE Fixed Income LLC.
Korean government bonds were incorporated into the FTSE Russell World Government Bond Index (WGBI) in October last year. FTSE Russell WGBI is one of the largest government bond indices in the world, including government bonds from 26 major countries. Funds tracking WGBI are estimated to be about 3,600 trillion won. The share of Korea within the WGBI announced at the time of incorporation was 2.22%, and the actual index reflection will begin in November of this year, with plans to gradually expand the incorporation share over the course of one year.
Since the announcement of the WGBI incorporation, interest in investing in Korean government bonds has been increasing. According to the Korea Securities Depository, the size of foreign investors' use of the government bond integrated account has continued to rise since the announcement of the incorporation of Korean government bonds into the WGBI, surpassing a cumulative transaction amount of 60 trillion won as of the end of January. Investing in the ACE FTSE WGBI Korea ETF allows one to benefit directly from the influx of global funds into government bonds.
Jo Ik-hwan, chief of the FI Management Division 1 at Korea Investment Trust Management, noted, "If you are interested in investing in Korean government bonds after their incorporation into WGBI or if you are looking into bonds with long remaining maturity, this would be a good choice."
Meanwhile, the ACE FTSE WGBI Korea ETF is an income-distributing product, and it should be noted that there is a possibility of principal loss depending on the performance results.