Treasuries help cushion volatility in U.S. tech stocks... Samsung Asset Management lists new ETF

[Financial News] Samsung Asset Management is introducing a bond-and-equity exchange-traded fund (ETF) that lowers volatility risk by investing equally in U.S. technology stocks and short-term U.S. Treasury bonds.
Samsung Asset Management said on the 9th that it would list a new ETF, the 'KODEX US Nasdaq 100 US Treasury Bond Balanced 50,' on the 10th.
The ETF invests 50% each in the U.S. Nasdaq-100 Index and short-term U.S. Treasury bonds with one to three months remaining until maturity. Through the Nasdaq-100, it captures the growth potential of leading U.S. technology companies such as NVIDIA, Apple and Microsoft, while enhancing stability with short-term Treasury bonds, whose prices are relatively less affected by interest-rate changes.
It uses a 'daily rebalancing' strategy, adjusting the stock and bond allocations to a 50:50 ratio each day. It maintains the target allocation by selling some assets that have risen in price and buying those that have fallen.
The product pays monthly distributions in the middle of each month, with the 15th of each month serving as the record date. It is unhedged against foreign-exchange movements, which are reflected in returns, and has a total expense ratio of 0.25% per year.
Investors can allocate up to 100% of their investment to it through defined-contribution (DC) retirement pension and individual retirement pension (IRP) accounts. While retirement pension accounts limit investments in risk assets to 70%, that limit does not apply to this bond-and-equity ETF because its stock allocation is below 50%.
Kim Jeong-hyeon, a manager at Samsung Asset Management, described it as “an asset-allocation product that combines the stability of short-term U.S. Treasury bonds, the growth potential of the Nasdaq-100 and the appeal of monthly dividends,” and said, “As the year-end pension season approaches, it will be an alternative that can effectively increase the Nasdaq-100 allocation in retirement pension accounts.”
[email protected] Seo Min-ji Reporter