Korea Post to tap two GPs for global ESG bond ETFs

Korea Post, South Korea's state-run postal service agency, said on April 21 that its insurance arm will select a maximum of two asset managers for global environment, social and governance corporate bond exchange-traded funds with an unspecified value. The benchmark will be the Bloomberg MSCI Global Corporate SRI Index.  

For applications, the asset managers should be a financial investment firm under Korea’s Financial Investment Services and Capital Markets Act or a global financial institution managing assets such as equities and overseas bonds. The asset manager needs to have more than a three-year track record in global bond ETF management as of end-February, 2022.

Global investment firms should manage $5 billion or more in bond assets, while domestic investment firms should manage 100 billion won ($8.04 million) or more in a global bond ETF as of end-February, to apply. 

The insurance bureau will allocate 80% to quantitative assessment and 20% to qualitative assessment, conduct due diligence and select the managers.

For quantitative evaluation, the global bond ETF’s initial target size and average balance during the assessment period, between March 2019 and February 2022, should be respectively 10 billion won or more. The ETF should have a management record of three years or longer, tracking Bloomberg Barclays Global Aggregate Index or Bloomberg Barclays Global Aggregate Corporate Total Return Index as a benchmark.

Korea Post will receive applications by May 6 and will announce the selected general partners in May or June. The application should be written in Korean, Korea Post said.

Write to Tae-Ho Lee at thlee@hankyung.com
Jihyun Kim edited this article.