As stock market volatility increases, funds are flowing into bond-mixed exchange-traded funds (ETFs) that combine stocks and bonds. The total assets of related ETFs have surged nearly 60% this year, surpassing 24 trillion won.
According to financial information provider FnGuide, as of September 3, the total net assets of domestic bond-mixed ETFs were recorded at 24.3725 trillion won. This figure excludes target date fund (TDF) ETFs and includes both domestic and foreign bonds. Compared to 15.3208 trillion won at the end of January, this represents a 59.1% increase.
The growth of domestic bond-mixed ETFs, excluding foreign bonds, has been even more pronounced. During the same period, total net assets rose from 9.4766 trillion won to 15.6017 trillion won, marking a 64.6% increase.
Bond-mixed ETFs operate by combining stocks and bonds within a single product. They aim to provide stability through bonds while seeking additional returns from rising stock markets.
Notably, bond-mixed ETFs with less than 50% stock allocation are classified as safe assets under retirement pension regulations, allowing for up to 100% inclusion in accounts. This has led to increased utilization by investors looking to raise their effective stock investment ratio within retirement accounts.
In fact, the total net assets of domestic and foreign bond-mixed ETFs swelled to 25.6227 trillion won during a period of strong stock market performance in June. Although this figure has since decreased to the 24 trillion won range due to increased market volatility, it still represents approximately 1.6 times the amount compared to the beginning of the year.
With retirement pension reserves exceeding 500 trillion won, the demand for stock investments through pension accounts continues to grow, contributing to market expansion. Investors are drawn to the potential for stock price increases while benefiting from relatively lower volatility compared to pure stock ETFs.
Asset management firms are also accelerating the launch of related products. From January to August this year, a total of 18 new bond-mixed ETFs were listed, including 12 domestic bond ETFs and 6 foreign bond ETFs.
Notably, products combining semiconductors and bonds have stood out. Among the 18 newly listed bond-mixed ETFs this year, 11 include domestic and foreign semiconductor stocks such as Samsung Electronics and SK Hynix. All four products launched last month also incorporated semiconductor stocks in their equity components.
Han Soo-jin, a senior researcher at Samsung Securities, stated, "The demand for retirement pensions seeking to maintain stock investment ratios while reducing volatility is driving the growth of bond-mixed ETFs. The products are expanding from combining existing representative indices with bonds to incorporating individual stocks or themes along with bonds."
* This article has been translated by AI.
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