The fastest growth has come not from its plain index trackers, but from two bond-mixed products designed to take advantage of a 2023 revision to pension-account rules allowing investors to hold them at a full 100 percent allocation.
The four funds held a combined 1.0431 trillion won (US$691 million) as of the end of last month. Two are straightforward index trackers: 1Q US S&P 500, which follows the 500 large-cap U.S. stocks in the Standard & Poor's 500, held 308.9 billion won, while 1Q U.S. Nasdaq 100, tracking the technology-heavy Nasdaq 100, held 181.3 billion won.
The more telling numbers belong to the other two. The bond-mixed products, 1Q U.S. S&P 500 U.S. Treasury Mixed 50 Active and 1Q U.S. Nasdaq 100 U.S. Treasury Mixed 50 Active, held 286.0 billion won and 266.9 billion won respectively, together accounting for more than half the four-fund total despite being the more specialized offering.
The reason is regulatory. Under a supervisory revision that took effect in 2023, these "second-generation" bond-mixed ETFs carry up to a 50 percent weighting in a U.S. index yet are classified as non-risk assets.
That classification is the entire story. Current rules bar a retirement pension account from holding more than 70 percent of its reserves in risk assets such as equities.
Because the bond-mixed ETFs fall outside that cap, pension investors can hold them at a full 100 percent weighting in defined-contribution, individual retirement pension, and personal pension accounts, raising effective US-index exposure while preserving room under the risk-asset limit. It is that arbitrage, rather than raw appetite for U.S. stocks, that Hana credits for the inflows.
"On the basis of the convenience of real-time trading, low fees, and high management transparency, pension investors' use of ETFs is expanding rapidly," said Kim Tae-woo, chief executive of Hana Asset Management. "We plan to continue introducing a range of products tailored to the portfolio needs of pension investors."
The milestone illustrates a broader shift in how Korean retirement capital reaches Wall Street: not through direct equity allocation, which the rules constrain, but through structures designed around the constraint itself.
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