The Nation's First 'US SPAC ETF' to Launch

[Asia Economy Reporter Hwang Junho] Korea Investment Trust Management launched the KINDEX US SPAC & IPO INDXX ETF on the 4th, allowing investment in the US SPAC (Special Purpose Acquisition Company) boom.

This product tracks the INDXX SPAC & NEXTGEN IPO INDEX, which consists of 40% common stocks of SPACs listed in the US and 60% of stocks listed through mergers with SPACs. It seeks investment opportunities in the US IPO market, where SPAC merger listings are active, focusing on new growth industries.

It invests in about 300 stocks including electric vehicle manufacturer Lucid Group (9.97%), sports betting and online casino operator DraftKings (4.27%), Pershing Square Tontine Holdings (2.78%) founded by hedge fund mogul Bill Ackman, one of the top three US space development companies Virgin Galactic (1.37%), and solid-state battery manufacturer for electric vehicles QuantumScape (0.89%). Additionally, at the end of each month, new SPAC and SPAC merger IPO stocks are reviewed for inclusion or exclusion, focusing on holding high-quality stocks in the early stages of listing.

Jung Sung-in, head of the ETF Strategy Team at Korea Investment Trust Management, said, "Interest in US SPACs and SPAC merger IPO stocks is increasing, but domestic individual investors have found it difficult to invest easily due to insufficient information." He added, "By using ETFs that allow small-scale diversified investment, investors can seize M&A and IPO investment opportunities in US SPACs while effectively managing investment risks caused by market volatility."

Korea Investment Trust Management also launched a domestic exchange-traded fund (ETF) that can ride the US Green New Deal trend. This product tracks the INDXX US GREEN INFRASTRUCTURE INDEX, which consists of core stocks in the US eco-friendly industry.

It invests in about 50 US-listed stocks generating more than 50% of sales in seven sectors: eco-friendly transportation, renewable energy, eco-friendly fuels, eco-friendly energy equipment, pollution control, waste management, and environmental development and management.

Stocks with high weights include eco-friendly infrastructure solutions provider AZZ (2.40%), renewable energy-related service provider Aegon (2.17%), waste management company Clean Harbors (2.06%), and eco-friendly fuel cell developer Ballard Power Systems (1.49%).

Team leader Jung said, "Among 96 US ESG ETFs, 25 specialize in eco-friendliness, and global funds are flowing massively into renewable energy-themed ETFs." He added, "The US eco-friendly theme is expected to directly benefit from global countries' stimulus policies centered on eco-friendly infrastructure and the large-scale Green New Deal policy announced by the Biden administration, so ETFs that carefully select and invest in related high-quality stocks are worth watching."