Shinhan Asset Management, 'SOL China Solar CSI ETF' Rebounds

[Asia Economy Reporter Hwang Yoon-joo] Shinhan Asset Management's 'SOL China Solar CSI (Synthetic) ETF' maintained the highest 3-month return among all listed exchange-traded funds (ETFs) for a month (July 13 to August 9).

Shinhan Asset Management announced on the 12th that as of the closing price on the 9th, the ETF recorded a 3-month return of 47.33%, maintaining the top position among all 598 ETFs listed domestically for a month. As the Chinese solar power index, which had been stagnant for a month, rebounded, the SOL China Solar CSI (Synthetic) ETF rose 4.63% in a single day on the 9th.

The rebound in the solar power index was largely influenced by a press release announced on the 8th by Bloomberg and the China Photovoltaic Industry Association (CPIA). According to CPIA data, the scale of new solar installations in China in the first half of 2022 increased by 137% compared to the same period last year. While the market had been concerned about rising material prices due to increased polysilicon prices and resulting raw material shortages, these concerns were alleviated by the official announcement.

The polysilicon production volume in 2022 is expected to be about 912,000 tons, which is enough to produce approximately 300GW of solar modules. The China Silicon Industry Association estimates that the polysilicon production scale in 2023 will be about 1.55 million tons, sufficient for about 500GW of solar modules.

As of the end of 2022, China's new solar power installation capacity was approximately 80 to 100GW, significantly surpassing the United States' 15 to 25GW. Polysilicon production is about 16 times that of the U.S., and ingot/wafer production is about 20 times greater, dominating the global solar power value chain overall.

Kim Jung-hyun, Head of ETF Management Center at Shinhan Asset Management, said, "The 2022 Inflation Reduction Act, passed by the U.S. Senate on the 7th, explicitly includes support and tax benefits for eco-friendly and climate change-related sectors such as solar power." He added, "Following the additional plans of the REpowerEU Plan in May and the U.S. Department of Commerce's exemption of tariffs on solar panels, positive developments continue in the industry, indicating that the solar power industry is entering a big cycle."

Meanwhile, the SOL China Solar CSI (Synthetic) ETF, listed on December 22, 2021, is the only solar sector ETF in Korea, diversifying investments across 50 companies in China's solar value chain, the global leader in solar power. Its returns since the beginning of the year are 6.84%, 47.33%, and 23.22% for 3 months and 6 months, respectively.