Tesla Launches 'All-In ETF' Investing 30% of Assets in Nvidia
Ideal for 'Pension Ants' Looking to Increase Stock Weight in Desired Companies
[Asia Economy Reporter Junho Hwang] A so-called 'all-in ETF (single-stock exchange-traded fund)' that invests 30% of total assets in US companies Tesla or Nvidia has been launched. The remaining 70% of the assets are filled with bonds, allowing the stock ratio to be increased by up to 12% when invested through retirement pension accounts, making it likely to attract aggressive 'pension ants (individual investors)'.
The Emergence of All-in ETFs
On the 28th, the KOSPI opened at 2,425.05, down 12.81 points (0.53%) from the previous trading day, at the Hana Bank headquarters dealing room in Jung-gu, Seoul. On the same day, the won-dollar exchange rate started at 1,336.0 won, up 12.3 won from the previous trading day. Photo by Hyunmin Kim kimhyun81@
According to the asset management industry on the 29th, four types of 'all-in ETFs' were listed on that day.
The form of all-in ETFs is a bond-mixed ETF, which is a relatively stable product, but looking inside, it has an aggressive investment nature. 60 to 70.5% of the assets are filled with bonds, creating a stable income structure. However, the remaining 29.5 to 40% of the assets are invested in a small number of blue-chip stocks. Previously, ETFs had to include at least 10 stock items, but the listing regulations were revised last August to allow more than 10 items combining stocks and bonds, leading to the emergence of such products.
Degrees of All-in Investment
The four products listed on that day invested 29.5 to 40% of assets in at least one stock. For example, Korea Investment Trust Management's 'ACE Nvidia Bond Mixed Bloomberg ETF' invests 30% of its assets in Nvidia, a global semiconductor company. Mirae Asset Management also launched an ETF that is all-in on Tesla (29.5%). Both products focus on popular stocks among overseas Korean investors but have seen significant price declines this year.
Kim Chanyoung, Head of Digital ETF Marketing at Korea Investment Trust Management, explained, "As the global hegemony competition in the semiconductor market intensifies, the stocks have experienced excessive declines compared to market indices, but since they hold core foundational technologies for all industries and lead market growth in the long term, we expect continued preference for these stocks."
Shinhan Asset Management also chose highly favored US stocks. However, unlike other products, it selected the top five stocks by market capitalization (Apple, Microsoft, Google, Amazon, Tesla). Although the number of stocks is large, the stock ratio is increased to 40%, which is a distinctive feature.
KB Asset Management uniquely chose domestic stocks. Unlike other products, it adopted a strategy of diversifying 40% of assets into blue-chip stocks such as Samsung Electronics (semiconductors, 20%), Samsung Biologics (bio), and Samsung SDI (secondary batteries).
Invest Through Pension Accounts
Although all-in ETFs are aggressive, being bond-mixed products and classified as safe assets may appeal attractively to pension ants. The stock ratio in retirement pension accounts is limited to 70%, and the remaining 30% must be invested in safe assets. However, by holding all-in ETFs, investors can effectively add up to 40% of the safe asset portion, or 12% of total assets, to stocks.
Kim Junghyun, Head of ETF Management Center at Shinhan Asset Management, explained, "It is a product that allows more aggressive management in retirement pension accounts." Geum Jeongseop, Head of ETF Marketing at KB Asset Management, predicted, "It will be a good alternative for investors who want to maximize the stock ratio in retirement pension accounts during market corrections."
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