Differentiation with Non-Memory Semiconductors... KB Active ETF Launch

[Asia Economy Reporter Junho Hwang] KB Asset Management launched an active exchange-traded fund (ETF) on the 10th. Although its active ETF release was about half a month later than other asset managers, it targeted the market with a differentiated theme compared to other active ETFs.

The ‘KBSTAR Bi-Memory Semiconductor Active ETF’ is an equity-type active ETF that invests in domestic stocks related to system semiconductors, which account for 74% of the global semiconductor market. The benchmark for this product, the 'iSelect Bi-Memory Semiconductor Index,' consists of common stocks listed on the KOSPI and KOSDAQ markets covering the entire bi-memory semiconductor industry. Major holdings include Samsung Electronics (12.9%), DB HiTek (10.6%), and LIG Nex1 (9.3%).

Bi-memory semiconductors, also called system semiconductors, are semiconductors designed for information processing. They are key components of the 4th Industrial Revolution, including artificial intelligence, IoT, and autonomous vehicles. Recently, Samsung Electronics announced plans to invest 133 trillion KRW in the bi-memory semiconductor sector by 2030.

KB Asset Management is targeting the market with a differentiated theme. On the 25th of last month, four asset managers including Samsung Asset Management launched a total of eight active ETFs. About four of these products invest in future cars, while others invest in renewable energy, ESG, and BBIG sectors.

The product with the highest current return is the KODEX K-Future Car Active ETF, which had a return of 6.35% as of the 7th. According to Samsung Asset Management, this return is about 2.92 percentage points higher than the KOSPI index increase rate of 3.43%.

Meanwhile, KB Asset Management also launched the KBSTAR Fn Contact Representative ETF on the same day. This product invests with a weighting of 61% large-cap stocks and 39% mid-cap stocks in sectors benefiting from contact. Representative investment stocks include Korean Air 15.9%, HYBE 9.6%, among others. Additionally, with the addition of three bond ETFs last month, KB Asset Management now manages 20 out of 60 bond ETFs.

Lee Hyun-seung, CEO of KB Asset Management, stated, "With this ETF launch, KB Asset Management has established a product lineup capable of generating profits in all phases of rising interest rates or expanding and contracting long- and short-term interest rate spreads."