Large Blue-Chip Stocks' Year-End Rebound Boosts Group Stock Funds' Profit Recovery

High Inclusion Ratio of Group Stocks in Funds
Samsung Electronics Rises 11% in One Month
Samsung Group Stock Fund Returns 'Soar'

[Asia Economy Reporter Minji Lee] As the stock prices of large-cap blue-chip stocks fluctuate at the end of the year, the returns of group stock funds are starting to stretch out.

According to financial information provider FnGuide on the 29th, the one-month return of Samsung Group funds with assets under management of over 1 billion KRW was 3.35% as of the previous day, while other group funds showed a return of 4.20%. Over the past six months, Samsung Group stock funds had fallen by 4.23%, and other group stock funds by 8.9%. This means they have shaken off their previous sluggishness.

The improvement in Samsung Electronics' supply and demand this month was the main contributor. The weighting of Samsung Electronics within group stock funds approaches 20%. Samsung Electronics rose 11% in one month and returned to the 80,000 KRW level after about four months, supported by the easing of parts shortages caused by the global supply chain disruption and expectations of improved semiconductor demand next year. In addition, large-cap stocks such as SK Hynix (9%), Hyundai Motor (6.7%), and Mando (12.3%) also rose, contributing to the improvement in returns. SK Hynix's stock price reflected expectations of earnings growth next year due to the improvement in the DRAM market and Intel's acquisition of its NAND business division. Hyundai Motor rose on news that it will no longer produce internal combustion engine models and will focus on electric vehicle launches, while Mando showed an upward trend amid expectations of increased parts supply for electric vehicles.

Among group stock funds, Samsung Group stock funds stood out in terms of returns. This was partly because the weighting of Samsung Electronics was higher compared to other group stock funds, but also because the stock prices of Samsung Group companies rose significantly. Samsung Electro-Mechanics (14%), Samsung C&T Corporation (9.7%), Samsung Heavy Industries (6%), and Samsung Fire & Marine Insurance (6%) were among those that contributed. Only Samsung SDI dragged down performance, falling more than 8%.

By fund, Mirae Asset TIGER Samsung Group ETF (exchange-traded fund) achieved the highest return at 4.9%, followed by IBK Samsung Group Fund (4.89%), Woori Samsung Group Fund (4.83%), and Korea Investment Gold Accumulation Samsung Group Fund (4.64%).

Interest in large-cap stocks is expected to continue into early next year. It is forecasted that with supply chain improvements and normalization of monetary policies in major countries, investment sentiment may shift from growth stocks to large-cap stocks. Jaehwan Heo, a researcher at Eugene Investment & Securities, explained, "Recently, growth stocks with high valuation burdens have shown sluggish performance. Large-cap value stocks or blue-chip stocks can improve performance without price burdens, so market interest is bound to increase."