NH Investment and Securities leading ETN market

NH Investment and Securities has been leading the exchange-traded notes (ETN) market, having launched diverse ETN products. / Courtesy of NH Investment and Securities

By Yoon Ja-young

An increasing number of investors are turning their eyes to exchange-traded note (ETN) as a mid-risk, mid-return investment tool, especially following the central bank’s slashing of the key rate to a historically low 1.5 percent. NH Investment and Securities has been leading the new market, with diverse lineup of ETN products.

The investment return on ETNs is determined by diverse benchmark indices such as stocks, overseas stocks and foreign exchange rates. It is listed on the market to be freely traded like stocks.

The biggest strength of ETNs is that they promise to pay the exact amount reflected in the index.

On top of that, investors find ETNs attractive as they suggest investment strategies. “octo Big Vol ETN,” the first ETN launched by NH Investment and Securities, for instance, composed its portfolio based on the idea that “large stocks that had shown high volatility for past six months tend to perform well.” Its “octo WISE Dividend ETN,” meanwhile, buys dividend-paying stocks that have high internal reserve ratios. ETN products disclose their investment strategy from the beginning, focusing on reaping gains following such strategies.

“Our team has been marking considerable investment returns from proprietary trading using algorithms for Big Vol ETN and WISE Dividend ETN. Many were concerned when the stock selecting system of Big Vol ETN suggested investing in Amore Pacific and LG Household and Health Care while giving up SK Hynix and Naver. However, we followed the strategy, and are enjoying the outcome,” said Son Gyeong-hyeon, head of the strategy management team at NH. Big Vol ETN has recorded a 25.85 percent investment return and WISE Dividend, 11.11 percent, since last November when they were issued.

NH Investment and Securities is now the biggest issuer of ETNs in the country, having listed a total of 16 products on the market.

“We have confidence that ETNs will be leading innovation in the investment market. We will continue developing diverse ETN products in the future and supply investors with a wide range of options,” Son said.