Samsung Asset Management to list ETF splitting investment between US Treasurys and NASDAQ 100

Samsung Asset Management said Monday it will list a new monthly-dividend ETF — the KODEX US Nasdaq100 US Bond Blend 50 — on Tuesday, allocating half of its portfolio to US short-term government bonds and the other half to the NASDAQ 100 index.

The bond-blend ETF invests 50 percent in US short-term government bonds with remaining maturities of one to three months, while the other half targets the growth potential of the NASDAQ 100, which is composed of AI and semiconductor innovators such as Nvidia, Apple and Microsoft.

In a bond-blend fund, longer bond durations can cause sharp price swings as interest rates move. This product minimizes that sensitivity by holding US short-term Treasurys with maturities of one to three months, while steadily accumulating dollar-denominated interest income.

The fund also employs a daily rebalancing strategy that precisely maintains the 50-50 split — within a tolerance of plus or minus 1 percent — by combining two assets with low correlation, maximizing the benefits of asset allocation and dampening volatility.

Another feature is a mid-month dividend structure that pays distributions every month, using equity dividends and interest income from the short-term Treasurys as the funding source, with the 15th of each month set as the record date. Investors who pair this ETF with conventional ETFs that pay at month-end can build a cash flow stream that delivers dividends twice a month. The product carries currency exposure, meaning won-dollar exchange rate movements are reflected in performance, and the total expense ratio is 0.25 percent per year.

Because the equity weighting is below 50 percent, the ETF qualifies as a bond-blend product and is exempt from the 70 percent risk-asset cap that applies to defined-contribution and individual retirement pension accounts, allowing investors to allocate up to 100 percent of their retirement funds to it.

"This is an asset-allocation product that combines the stability of US short-term government bonds, the growth potential of the NASDAQ 100, and the appeal of monthly dividends all in one," said Kim Jeong-hyeon, a fund manager at Samsung Asset Management. "As the year-end pension season approaches, it will be the optimal alternative for effectively maximizing NASDAQ 100 exposure within a retirement pension account."

Samsung Asset Management also announced that net assets in its KODEX US 10-Year Treasury Bond Active (H) ETF recently surpassed 200 billion won, reaching 204.1 billion won ($152 million). That product invests in US government bonds with seven to ten years remaining to maturity and related ETFs.