TIMEFOLIO Asset Management announced on the 20th that it will launch an exchange-traded fund (ETF) that tracks the Nasdaq 100 index while including bonds.
The TIMEFOLIO U.S. Nasdaq 100 Bond Mixed 50 Active, which will be listed on the 25th, is a product that combines U.S. tech stocks (less than 50%) and domestic short-term bonds (at least 50%) to pursue both growth and stability.
In retirement pension accounts (DC, IRP), stock-type ETFs can only be allocated up to 70%, but bond mixed ETFs can invest up to 100%. By utilizing this, one can maximize their investment in U.S. growth stocks alongside existing foreign stock-type ETFs.
For example, if 70% of the TIMEFOLIO U.S. Nasdaq 100 Active ETF is allocated, and 30% is allocated to this bond mixed ETF, it can achieve an effect of investing up to 85% of the portfolio in global tech-leading stocks.
The differentiated strategy from existing bond mixed ETFs is also noteworthy. At the end of 2023, due to regulatory easing, the equity ratio of bond mixed ETFs increased from 40% to 50%, but currently, there are not many ETFs applying the 50% ratio. This ETF is the only product that uses the Nasdaq 100 as a comparative index.
Bonds utilize domestic short-term bonds to minimize interest rate volatility and eliminate exchange rate risk. Generally, long-term bonds can have their prices adjusted sharply according to interest rate fluctuations, and particularly during investments in Government Bonds, exchange rate volatility can pose additional risks. Therefore, this ETF is designed to be relatively free from interest rate and exchange rate volatility by including domestic short-term bonds.
A TIMEFOLIO Asset Management official noted, “We have previously achieved excess revenue by initially including growth stocks like Palantir (PLTR) and MicroStrategy (MSTR) in the U.S. Nasdaq 100 Active ETF,” and “We plan to implement a differentiated management strategy based on active research in the bond mixed ETF as well.”