KBSTAR Money Market Active ETF: The No. 1 Parking ETF
4 min read · · Korean original
Contents 6
Hello, this is Bitpunk! Today we'll look at the KBSTAR Money Market Active ETF, which ranked first among parking ETFs that you can buy and sell at any time. In this post, you'll learn about this ETF's basic information, holdings, interest rate, taxes, and more.
Introducing KBSTAR Money Market Active
The KBSTAR Money Market Active ETF was listed in May 2023 and invests mainly in short-term financial products such as money market funds (MMFs). It is managed by KB Asset Management and is well known as a parking ETF in which domestic bonds and short-term commercial paper make up more than 70% of its holdings.
Main Investment Holdings
The main holdings of the KBSTAR Money Market Active ETF are short-term bonds with maturities of less than three months and commercial paper (CP), which make up 70% to 80% of the portfolio.
The remaining 20% to 30% is invested in more liquid assets such as repurchase agreements (RP), call loans (CALL), and certificates of deposit (CD). With this asset mix, investors can pursue stable returns and easily turn their holdings into cash by selling the ETF at any time.
| Holding | Description |
|---|---|
| Bonds | Short-term bonds with maturities of less than three months |
| Commercial Paper (CP) | Short-term notes issued by companies with high credit ratings |
| Repurchase Agreements (RP) | Bonds issued on the condition that they are bought back after a set period |
| Call Loans (CALL) | Short-term loans between financial institutions |
| Certificates of Deposit (CD) | Deposit certificates issued by banks that can be transferred before maturity |
Returns and Interest Rate
The KBSTAR Money Market Active ETF has an annual return of roughly 4%. However, it doesn't pay interest or dividends directly. Instead, it's structured so that the ETF's price rises by the amount of interest earned.
For example, if you hold this ETF for one year and then sell it, you can receive the price increase, equivalent to an annualized interest of about 4.2%, in the form of a capital gain. That said, this interest rate can change at any time depending on market conditions and investment circumstances.
| Period | Interest Rate |
|---|---|
| 1 month | 0.35% |
| 3 months | 1.05% |
| 6 months | 2.10% |
| 1 year | 4.20% |
15.4% Dividend Income Tax When You Sell
For bond ETFs like the KBSTAR Money Market Active ETF, dividend income tax is applied to capital gains, at a rate of 15.4%. For example, if you invest KRW 100 million for one year and earn KRW 4.2 million in capital gains, you would receive about KRW 3.5 million after deducting dividend income tax and various fees and taxes.
| Item | Amount |
|---|---|
| Capital Gain | KRW 4,200,000 |
| Dividend Income Tax | KRW 646,800 (15.4%) |
| Annual Fee | KRW 50,000 |
| Brokerage Commission | KRW 30,000 |
| Total Costs and Taxes | KRW 726,800 |
| Net Profit | KRW 3,473,200 |
Pros and Cons of the KBSTAR Money Market Active ETF
The KBSTAR Money Market Active ETF has the advantage that you can buy and sell it at any time and easily turn it into cash when needed. Also, because it holds a high proportion of short-term bonds and notes, you can pursue fairly stable returns. Its fee is also low, at 0.05% per year.
On the other hand, its returns are lower than those of equity ETFs, and they can also change with market interest rates and economic conditions. On top of that, you should also keep in mind that a 15.4% dividend income tax is charged when you realize your gains.
Wrapping Up
The KBSTAR Money Market Active ETF is an investment product that can offer relatively stable returns. In particular, it can be an attractive option if you want to park your money for a short period but want higher interest income than savings deposits. In fact, it even ranked first among parking ETFs.
For more detailed information, you can refer to the KB Asset Management website. We hope all investors will consider this carefully in line with their own investment style and money management goals. Thank you.
