Should I Include 'Samsung Electronics ETF' in My Retirement Pension?

[Asia Economy Reporter Hwang Junho] Asset management companies are launching exchange-traded funds (ETFs) that primarily invest in single stocks. Attention is focused on whether this will expand investment options within pension accounts.

According to the financial investment industry on the 7th, the six major domestic asset management companies are actively preparing to launch single-stock ETFs. Samsung Asset Management plans to launch an ETF investing in Samsung Electronics, Mirae Asset Management will release a "Tesla ETF," Hanwha Asset Management an "Apple ETF," and Korea Investment Management an "NVIDIA ETF."

KB Asset Management and Shinhan Asset Management are preparing ETFs with a small number of stocks. KB Asset Management plans to include Samsung Group stocks such as Samsung Electronics, Samsung Biologics, and Samsung SDI, while Shinhan Asset Management will launch a product investing in the top five stocks by market capitalization within the U.S. Nasdaq and S&P 500 indices.

Previously, mixed-type ETFs were regulated such that only a total of 10 stocks needed to be included regardless of asset type. This regulatory relaxation has made it possible to list single-stock ETFs containing one stock and nine bonds.

The advantage of investing in this product is that it allows investors to maximize the proportion of desired stocks within their pension accounts. Single-stock ETFs have a stock ratio of less than 40%, classifying them as safe assets. Therefore, if 70% of a defined contribution (DC) or individual retirement pension (IRP) account is invested in stock-type products (risky assets) and the remaining 30% in single-stock ETFs, the stock ratio within the account can be increased up to 79%. This enables long-term investment strategies such as "buying 100,000 KRW worth of Samsung Electronics every month" through pension accounts that offer tax benefits.

Kim Chanyoung, Head of Digital ETF Marketing at Korea Investment Management, explained, "We plan to create a bond-mixed product with overseas stocks (NVIDIA), which are of high interest to Korean investors, allowing for long-term investment through pension accounts."