Samsung Asset Management's KODEX US Technology ETF Tops 1-Month Returns

Focus on US Tech Stocks Including Meta, Apple, Amazon, Netflix, and Google

[Asia Economy Reporter Kwangho Lee] Samsung Asset Management announced that the ‘KODEX US FANG Plus (H)’ exchange-traded fund (ETF), which invests in leading U.S. technology stocks, recorded a 1-month return of 30.2%, ranking first among all general ETFs.

KODEX US FANG Plus (H) is an ETF that focuses on investing in 10 top U.S. technology companies recognized as the best innovative firms, including Meta, Apple, Amazon, Netflix, and Google.

Notably, among the 10 constituent stocks of this ETF, six stocks?▲Tesla ▲Apple ▲NVIDIA ▲Microsoft ▲Alphabet ▲Amazon?are all included in the top 10 stocks most held by foreign individual investors as of the 1st. This means that by investing only in this ETF, investors can simultaneously invest in representative stocks of the U.S. stock market. As of the 3rd, the returns reached 30.2% over the past month and 28.1% over the past three months.

The reason KODEX US FANG Plus (H) achieved the highest return increase among all ETFs was its differentiation as an equal-weighted index and currency-hedged product. This product tracks the equal-weighted NYSE FANG+ Index, investing equally in each stock.

As the earnings season began and big tech companies announced their results, Apple, Alphabet (Google), and Amazon, ranked 1st, 2nd, and 3rd in Nasdaq market capitalization, showed negative earnings, while relatively smaller market cap companies Meta, NVIDIA, and Netflix posted positive results.

Accordingly, among ETFs investing in U.S. big tech companies, KODEX US FANG Plus (H), which invests equally rather than by market capitalization weighting, was able to achieve diversification effects without concentration in specific stocks.

Additionally, by implementing currency hedging against the dollar, it allows investment in global leading technology stocks regardless of fluctuations in the dollar’s value. Recently, the possibility of easing the interest rate hike trend has led to a decline in the dollar exchange rate, bringing renewed attention to currency-hedged ETFs.

Furthermore, at the end of last year, the index provider limited the scope of constituent stocks to companies within U.S. territory, and the resulting portfolio changes had a positive effect. Due to the ICE index changes, Alibaba and Baidu were removed, and semiconductor company AMD and data cloud company Snowflake were added.

As a result, stocks heavily influenced by China’s policy decisions were excluded, and stocks more aligned with the index’s purpose were included, contributing significantly to the gains. Newly added stocks AMD and Snowflake rose 37% and 29%, respectively, after inclusion, contributing to the ETF’s positive returns.

Kim Dohyung, head of the ETF Consulting Team at Samsung Asset Management, said, “Since the beginning of 2023, with the global inflation slowdown and the potential easing of the U.S. interest rate hike trend, investment sentiment toward big tech companies, which had been negatively affected by steep rate hikes, has greatly improved.”

He added, “KODEX US FANG Plus (H) is an equal-weighted, currency-hedged ETF that allows diversified investment in core U.S. technology stocks and enables investment regardless of dollar value fluctuations, making it the most recommended ETF for investors wishing to invest in U.S. growth stocks at this time.”