Mirae Asset Securities will conduct a housing subscription for individual investor treasury bonds from the 9th to the 15th, spanning five business days. Starting this month, individual investors can invest in these treasury bonds not only through dedicated accounts but also via DC (defined contribution) and IRP (individual retirement pension) accounts.
The housing subscription can be applied for at Mirae Asset Securities' nationwide branches and through its mobile trading system (MTS) from 9 a.m. to 4 p.m. Customers holding DC or IRP accounts can apply for the housing subscription directly within the retirement pension product section of the MTS.
The total issuance amount this month is 230 billion won. By bond type: △2.29 trillion won in 3-year coupon bonds, △3 billion won in 3-year compound interest bonds, △50 billion won in 5-year bonds, △110 billion won in 10-year bonds, and △65 billion won in 20-year bonds.
The most significant feature is that individual investor treasury bonds with 10- and 20-year maturities can now be included in retirement pension accounts. This responds to the demand from retirement pension customers seeking long-term investment products. The total issuance amount has also increased by 8 billion won compared to last month, reflecting higher demand for long-term investments through expanded allocations of 10- and 20-year bonds.
The additional interest rates are: △0% for 3-year bonds, △0.1% for 5-year bonds, △0.35% for 10-year bonds, and △0.35% for 20-year bonds. If held until maturity, pre-tax returns are as follows: △11.3% (annualized average 3.8%) for 3-year coupon bonds, △11.8% (annualized average 3.9%) for 3-year compound interest bonds, △22.8% (annualized average 4.6%) for 5-year bonds, △59.3% (annualized average 5.9%) for 10-year bonds, and △161.8% (annualized average 8.1%) for 20-year bonds.
Investor interest in individual investor treasury bonds continues steadily. As of August this year, the cumulative housing subscription amount through Mirae Asset Securities, the sole sales agent, reached approximately 2.29 trillion won. Considering the total fundraising target of 1.4 trillion won, the average competition ratio stands at 1.6 to 1.
Individual investor treasury bonds are savings-type government bonds issued specifically for individual investors. They offer the stability of principal protection, apply additional interest rates upon holding until maturity, and provide benefits from a compound interest payment method (compound interest bonds). In dedicated accounts, a separate taxation benefit applies up to a total purchase limit of 2.29 trillion won for bonds with maturities of five years or more. For retirement pension accounts, taxation is deferred during the investment period, and if received as pension income in the future, low-rate pension income tax may apply depending on relevant conditions. Accordingly, a "two-track" investment strategy utilizing both dedicated accounts and retirement pension accounts according to investment duration and fund characteristics is possible.
A Mirae Asset Securities representative stated, "We expect individual investor treasury bonds to establish themselves as a new long-term investment alternative that can utilize up to 30% of stable assets in retirement pension accounts." They added, "In dedicated accounts, customer interest remains high for shorter-term five-year bonds; thus, dedicated accounts and retirement pension accounts will each meet investment demands suited to their respective characteristics."
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