Korean Group Stock ETFs Surge, Offering Investors Long-Term Growth Potential
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Investors seeking exposure to South Korea’s leading companies are finding success with exchange-traded funds (ETFs) focused on major domestic groups, as returns significantly outperform broader market indices.
Recent market activity has seen a strong rally in large-cap stocks, driving substantial gains in ETFs that track these companies. These ETFs, often composed of industry leaders in sectors like semiconductors, batteries, and shipbuilding, are increasingly viewed as attractive options for long-term investment due to the synergistic benefits of vertical integration within key industries.
Samsung Group ETF Leads the Charge
According to data from Koscom ETF Check released on Thursday, the ‘KODEX Samsung Group’ ETF has delivered a remarkable 50.6% return over the past six months, exceeding the KOSPI index’s growth of 47.97% during the same period. Even more impressive, the ETF’s three-month return stands at 32.02%, surpassing the KOSPI’s 28.1% gain.
The ETF’s portfolio is heavily weighted towards Samsung Electronics (25.05%), followed by Samsung C&T (12.41%), Samsung SDI (9.15%), Samsung Heavy Industries (8.26%), Samsung Fire & Marine Insurance (7.75%), and Samsung Electro-Mechanics (7.43%). This composition provides exposure to a diverse range of high-growth sectors, including semiconductors, shipbuilding, secondary batteries, and value industries. Analysts suggest this diversified approach offers resilience, allowing the portfolio to benefit even when specific industries experience temporary downturns.
Broader Group ETFs Demonstrate Strong Performance
The ‘RISE 5 major group stocks’ ETF has shown even more substantial gains, posting a six-month return of 59.55%, significantly outpacing the Samsung Group ETF and the KOSPI index. Its three-month return of 35.55% also exceeds the broader market benchmark. This ETF’s holdings include SK Hynix (15.23%), Samsung Electronics (11.68%), Hyundai Motor Company (7.02%), and SK Square (5.32%), offering a “comprehensive gift set” of exposure to the domestic market.
Other group ETFs are also experiencing strong momentum. ‘TIGER LG Group + Fundamentals’ has recorded returns of 26.02% and 43.67% over the past three and six months, respectively. The inclusion of companies like LG Electronics, along with its subsidiaries, and their recent involvement in artificial intelligence (AI) and stablecoin-related ventures, are seen as catalysts for further growth.
Automotive and Industrial ETFs Gain Traction
ETFs focused on the automotive sector are also performing well. ‘TIGER Hyundai Motor Group + Fundamental’, tracking Hyundai Motors (27.46%), Kia (23.86%), and Hyundai Mobis (14.58%), has risen 44.47% over the past six months, with a recent one-week increase of 11.96%, ranking it among the top-performing stock ETFs. The upward trend is attributed to the ongoing strength in the automobile industry, coupled with potential gains from robotics and autonomous driving technologies.
Similarly, ‘ACE POSCO Group Focus’ is benefiting from POSCO Group’s vertical integration in the secondary battery industry. With significant holdings in POSCO International (25.06%), POSCO Holdings (24.9%), POSCO Future M (24.06%), and POSCO DX (16.12%), the ETF is positioned to capitalize on the growing demand for battery materials and related technologies.
Finally, ‘PLUS Hanwha Group Inc.’, with investments in Hanwha Ocean (26.14%), Hanwha Aerospace (18.51%), and Hanwha Systems (12.83%), is attracting attention due to the promising outlook for the shipbuilding, defense, and space industries.
Lim Tae-hyuk, head of ETF division at Samsung Asset Management, emphasized the strength of these group ETFs, stating, “Samsung Group Stock ETF is characterized by a collection of industry-leading stocks, and other group stock ETFs can also benefit from vertical integration synergy.” He further added that these ETFs are “suitable for long-term investment as the domestic stock market is likely to continue to rise.”
