Kakao Bank has introduced a principal-protected equity-linked bond (ELB) fund, which determines returns based on the movements of the KOSPI 200 index.
The bank announced the launch of the principal-protected 'ELB Fund' on October 20.
ELB funds are products that pay agreed returns if the stock index or individual stock prices meet predetermined conditions. The eligibility for early redemption is assessed at set intervals.
The newly launched fund offers a return of 7.4% annually, provided the KOSPI 200 does not decline. Every three months from the start date, the KOSPI 200 index will be evaluated, and if it is equal to or higher than the initial benchmark, the principal and agreed returns will be paid out, concluding the investment. At this point, returns will be calculated based on the 7.4% annual rate for the three-month period.
Conversely, if the index falls below the benchmark, the investment will continue until the next evaluation. If the early redemption conditions are not met, the investment will be held until maturity, which is three years, aiming for principal repayment as long as there is no credit risk from the issuer.
However, if the fund is redeemed before maturity or if the issuer faces credit risk, there may be a loss of principal. The fund is also not covered by deposit protection.
The subscription period for the fund is open until October 30. Customers can check the product conditions and subscribe through the fund menu in the Kakao Bank app's 'Investment' tab.
Since starting fund sales in January 2024, Kakao Bank has been expanding its product offerings. The number of fund products has increased from six at launch to 80 currently, with fund sales exceeding 1.8 trillion won as of the first half of this year.
A Kakao Bank representative stated, "We introduced the ELB fund to provide new investment opportunities for customers during a period of high market volatility. We will strengthen our lineup to allow customers to choose from a variety of investment products that suit their investment preferences and market conditions."
* This article has been translated by AI.
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