Kiwoom Asset Management Launches KOSEF US Crude Oil Energy Companies ETF

Kiwoom Asset Management announced on the 11th that it will list the 'KOSEF US Oil & Energy Companies' Exchange-Traded Fund (ETF), which invests in US oil and gas-related companies, on the Korea Exchange on the 16th.

KOSEF US Oil & Energy Companies invests in US oil and gas companies, a country that is both an oil producer and a natural gas exporter. It is based on the ‘MSCI US IMI Energy 25/50 Index,’ which consists of about 110 companies in the energy sector listed in the US. This ETF invests in US energy companies rather than oil futures, aiming to benefit from rising oil prices, and is managed as a physical ETF rather than a synthetic one.

Investing in listed stocks rather than futures allows investment in the direction of oil prices without rollover costs associated with futures trading. Synthetic products replicate the returns of the underlying index through swap transactions with securities firms, so dividends do not occur in the portfolio. Physical products that directly include the underlying index components can receive dividends from the included stocks.

Looking at the KOSEF US Oil & Energy Companies portfolio, integrated oil and gas companies account for 38%, and upstream companies account for 29%. By company, ExxonMobil (21.5%), Chevron (14.5%), and ConocoPhillips (7.4%) have high weightings. Since these companies operate businesses closely related to international oil prices, their performance, dividends, and stock prices show positive trends during periods of rising oil prices. Energy companies are representative high-dividend stocks.

The total expense ratio of KOSEF US Oil & Energy Companies is 0.29% per year. It is a currency-exposed type without currency hedging, so it is affected by fluctuations in the KRW-USD exchange rate.

Jung Sung-in, head of the ETF Marketing Division at Kiwoom Asset Management, introduced, "The KOSEF US Oil & Energy Companies ETF is an alternative that allows investment in the outlook of oil price direction by investing in listed companies related to oil and gas." He added, "In the short term, it will be a good product for those seeking investment opportunities amid high volatility, and during periods when international oil prices structurally rise, investors can intensively enjoy the benefits of rising energy company stock prices and dividend expansion."