Korea Investment Trust Management announced on the 26th that it will change the name of the Exchange-Traded Fund (ETF) 'ACE CD interest rate & short-term bond active' to 'ACE money market active.' The effective date is set for the 30th.
The ACE CD interest rate & short-term bond active ETF is a parking type ETF launched by Korea Investment Trust Management in 2024. It is a product that calculates the interest earned from short-term bonds such as Certificates of Deposit (CDs) or the Korea Overnight Financing Rate (KOFR) on a daily basis and applies it as compound interest. It has high utility for managing idle funds in short-term financing or retirement accounts.
Korea Investment Trust Management explained that it is changing the fund name to better reflect the investment strategy. The assets included in the ACE CD interest rate & short-term bond active ETF are bonds with a remaining maturity of 3 months or less and a credit rating of AA or higher, as well as corporate commercial papers and CDs that include short-term debentures. This strategy is similar to a money market fund (MMF) management strategy that focuses on short-term financial products and reflects short-term interest rate fluctuations in the fund's revenue. The benchmark index name was also changed from 'MK-KAP CD interest rate & short-term bond total return index' to 'MK-KAP money market total return index' to enhance intuitiveness.
The portfolio management approach remains the same as before. Short-term bonds and corporate commercial papers will be included in the portfolio at 70%, CDs at 20%, and cash-equivalent assets at 10%. The strategy of selecting securities with higher interest revenue within similar ratings to pursue excess revenue compared to the 91-day CD rate remains unchanged. As of the last business day (23rd), the 91-day CD rate was 2.67%, and the ETF's yield to maturity (YTM) as of the 23rd was recorded at 2.88%. The duration is 0.16 years.
Kim Dong-joo, the chief portfolio manager at Korea Investment Trust Management FI Management Department 1, said, "Many individuals are having difficulty choosing investment opportunities as market volatility continues. A parking-type ETF, which allows one to earn interest even with just one day of investment and has no mandatory subscription period, can be a good alternative to secure liquidity when needed."
He added, "We are investing in undervalued securities that have high interest revenue within similar ratings to pursue maximum yield to maturity," and noted, "This product is also suitable for portfolio investment in not only short-term fund management but also defined contribution (DC) retirement plans or individual retirement plan (IRP) accounts."