Kiwoom Asset Management said on the 8th that it will newly list the KIWOOM U.S. S&P 500 & GOLD exchange-traded fund (ETF) on the 9th.
This product invests with a fixed allocation of 90% in the Standard & Poor's (S&P) 500, the leading U.S. index, and 10% in gold (spot). It adds gold, which has shown downside protection during periods of market stress, to the S&P 500, which has shown strong long-term growth potential. Through this, the strategy lowers volatility while keeping returns solid. .
According to Kiwoom Asset Management, during the collapse of the dot-com bubble in 2000 and the global financial crisis in 2008, the S&P 500 fell 42% and 44%, respectively, while gold rose 22% and 16%. It is assessed that gold can serve as an effective buffer during prolonged downturns.
Gold also shows a structural uptrend during periods of dollar weakness. As such, it can help offset the currency risk of the S&P 500, which is a dollar-based asset. The recent trend of major Central Banks steadily increasing the share of gold in their foreign exchange reserves is also seen as a factor that strengthens the strategic value of gold.
The fund's total fee is 0.01% per year. Another strength is that investors can gain exposure to the S&P 500 (90%) and gold (10%) simultaneously at a very low expense. This 9-to-1 combination has a daily return correlation coefficient of about 0.99 with the S&P 500 index, and Kiwoom Asset Management said it can maintain the S&P 500's upward momentum while reducing losses during downturns to improve long-term compound returns.
Lee Kyung-jun, head of ETF management at Kiwoom Asset Management, said, "The KIWOOM U.S. S&P 500 & GOLD ETF is a strategic core product that maintains the strengths of existing S&P 500 investing while enhancing protection against market volatility," adding, "Based on an ultra-low total fee structure of 0.01%, we expect it to establish itself as a new flagship ETF that long-term investors can use without burden."