Ants Bought 'China and Electric Cars'

Personal Net Purchase of ETFs Until the End of July This Year
China, Electric Vehicle Keywords

[Asia Economy Reporter Junho Hwang] "Retail investors' choice is China, electric vehicles."

Among the 65 newly listed exchange-traded funds (ETFs) listed by the end of July this year, only four ETFs recorded net purchases exceeding 10 billion KRW, and their common theme can be summarized as China and electric vehicles.

According to financial information provider FnGuide on the 9th, a total of 65 ETFs were listed on the domestic stock market by the end of July this year. The net purchase amount reached 161 billion KRW. Among them, only four ETFs attracted more than 10 billion KRW in funds. ‘KINDEX G2 Electric Vehicle & Autonomous Driving Active’ attracted 27.9 billion KRW. It received the largest amount of funds among ETFs launched this year. It is the only product listed domestically that simultaneously invests in China, which has an electric vehicle supply chain, and the United States, which holds dominance in the autonomous driving industry. Since its launch in February, its return has been 4.46%.

Hwang Woo-taek, head of Korea Investment Trust Management, which manages this ETF, said, "The stock prices of the electric vehicle industry, which has a relatively high proportion of technology and growth stocks, will be affected in the short term by external factors such as global interest rate hike uncertainties and the presence or absence of a recession," adding, "In the mid to long term, it is judged that growth visibility is clear according to the carbon neutrality policies of major countries, which have a mandatory nature."

Following this, KODEX China Secondary Battery MSCI (11.28%), which invests in the secondary battery sector among Chinese electric vehicles, also recorded net purchases of 10.1 billion KRW. Lim Tae-hyuk, head of ETF management at Samsung Asset Management, analyzed, "‘Tianqi Lithium,’ which holds a 19% share (first place) in China's lithium carbonate industry, completed the largest IPO in Hong Kong, and investors have started buying at low prices due to expectations of benefits from government electric vehicle consumption stimulus measures."

After the Chinese electric vehicle market, net purchases worth 18.5 billion KRW continued for ‘TIGER China STAR Market STAR50 (-8.52%),’ which invests in new industries within China. Oh Min-seok, head of Global ETF Management, said, "Recently, within China, the STAR50 index performed well, supported by expectations that the China-Taiwan conflict will accelerate the use of domestically produced substitutes," adding, "The STAR50 index, composed mainly of companies in ‘strategic emerging industries’ such as new energy and semiconductors promoted by the Chinese government, is expected to be more attractive in the mid to long term than representative indices focused on traditional industries."

The second choice for retail investors' ETF investments was the United States. Due to the decline in the US stock market, funds flowed into TIGER US Nasdaq 100 Leverage (17.6 billion KRW), TIGER US Philadelphia Semiconductor Leverage (9.1 billion KRW), and others.