Kiwoom Asset Management launched bond-hybrid exchange-traded funds (ETFs) designed to maximize equity exposure within Korean retirement pension accounts, which currently restrict risky asset allocation to 70% under existing regulations. On the 7th, the firm introduced the 'KIWOOM US Space Tech TOP2 Bond Hybrid 50' ETF, allocating 25% to SpaceX, 25% to Rocket Lab, and 50% to domestic short-term bonds. Bond-hybrid ETFs are classified as safe assets under Korean retirement account rules, enabling investors to achieve up to 85% effective equity exposure by combining 70% equity ETFs with 30% bond-hybrid ETFs. Korea Exchange data showed bond-hybrid ETF net assets reached 12.3376 trillion won as of the previous day, a 258.73% increase compared to the end of last year. Ma Ji-hye, Director of Kiwoom Asset Management's ETF Solution Team, stated the products target retirement account holders seeking higher returns than traditional bond-only allocations.
Korean Retirement Accounts Limit Equity Allocation to 70%
Current regulations permit retirement pension accounts to invest a maximum of 70% in risky assets such as stocks. The remaining 30% must be allocated to safe assets including bonds. Bond-hybrid ETFs are classified as safe assets, allowing 100% allocation within retirement accounts. When investors allocate 70% to equity ETFs and 30% to bond-hybrid ETFs, the effective equity exposure within the account reaches up to 85%. Ma Ji-hye explained that bond-hybrid ETFs have gained popularity due to their high utility within retirement pension accounts.
Kiwoom Launched Samsung Electronics & SK Hynix Bond Hybrid ETF in April
Kiwoom Asset Management introduced the 'KIWOOM Samsung Electronics & SK Hynix Bond Hybrid 50' ETF in April, allocating 25% to Samsung Electronics, 25% to SK Hynix, and 50% to domestic short-term bonds. The product attracted 216.8 billion won in the three months following its listing. Ma Ji-hye noted the ETF is a monthly dividend product recommended for investors prioritizing cash flow. The fund distributes dividends in mid-month and pursues performance-linked special dividends when the ETF generates profits.
KIWOOM US Space Tech TOP2 Bond Hybrid 50 Allocates 50% to SpaceX and Rocket Lab
The 'KIWOOM US Space Tech TOP2 Bond Hybrid 50' ETF launched on the 7th invests 25% in SpaceX, 25% in Rocket Lab, and 50% in domestic short-term bonds. Ma Ji-hye stated that while space company stocks have shown high volatility recently, the industry merits attention as a national hegemony technology. She added that as SpaceX and Rocket Lab demonstrate vertical integration movements, the two companies' industry dominance will increase further.
Hyundai Motor Group Bond Hybrid ETF to List on the 14th
Kiwoom Asset Management will list the 'KIWOOM Hyundai Motor Group TOP3 Bond Hybrid 50' on the 14th, investing 50% across Hyundai Motor, Kia, and Hyundai Mobis, with 50% in domestic short-term bonds. Ma Ji-hye noted this is the only bond-hybrid ETF investing in Hyundai Mobis among such products. She explained Hyundai Mobis produces actuators, a key robotics component, and is gaining attention as Hyundai Motor Group's robotics business expands. Ma Ji-hye advised investors who have filled the 70% risky asset limit in retirement accounts and allocated the remaining 30% to cash or low-return bond ETFs to consider bond-hybrid ETFs.
FAQ
What is the maximum equity exposure achievable in Korean retirement accounts using bond-hybrid ETFs?
Investors can achieve up to 85% effective equity exposure by allocating 70% to equity ETFs and 30% to bond-hybrid ETFs. Bond-hybrid ETFs are classified as safe assets under Korean retirement account regulations, allowing 100% allocation despite containing equity components.
Which companies does the KIWOOM US Space Tech TOP2 Bond Hybrid 50 ETF invest in?
The ETF allocates 25% to SpaceX, 25% to Rocket Lab, and 50% to domestic short-term bonds. Kiwoom Asset Management launched this product on the 7th to provide exposure to the space technology sector within retirement accounts.
