Samsung Active Asset, Global Climate Tech Infrastructure Active ETF Listed

Samsung Active Asset Management announced on the 18th that it will list the third ETF of ‘KoAct,’ the ‘KoAct Global Climate Tech Infrastructure Active’ ETF.

Recently, the core focus of global investment has been on the climate tech industry and infrastructure reconstruction to respond to climate change. Climate tech refers to all technologies aimed at reducing carbon emissions across industries and addressing the adverse effects of climate change. Additionally, the reconstruction of outdated infrastructure in developed countries and future post-war recovery projects are expected to be centered around low-carbon energy.

The KoAct Global Climate Tech Infrastructure Active ETF invests not only in climate tech companies with carbon reduction technologies such as low-carbon energy including wind power, solar power, and nuclear power, electric vehicles, ESS (Energy Storage System), and virtual power plants, but also in key infrastructure companies related to power infrastructure and renewable energy power plant construction. The portfolio is constructed by adding carefully selected stocks from Samsung Active Asset Management’s research based on the ‘Solactive Global Climate Technology Infrastructure PR Index.’

While existing climate change-related ETFs have focused on specific sectors such as electric vehicles, secondary batteries, and renewable energy or had a high proportion of Chinese companies, the KoAct Global Climate Tech Infrastructure Active ETF is the first in Korea to include various detailed climate-related sectors such as renewable energy, power infrastructure, and carbon reduction technologies. Accordingly, it can actively adjust the portfolio according to industry cycles and respond swiftly, which differentiates it from existing individual thematic products.

The current KoAct Global Climate Tech Infrastructure Active portfolio does not include Chinese companies. This is because the rapidly growing global electric vehicle industry over the past few years is judged to be in a temporary oversupply state. For example, the price of lithium, a key raw material for electric vehicle batteries, has recently been declining. Furthermore, the Chinese eco-friendly sector faces continuous policy restrictions from major countries such as the United States and Europe, leading to adjustments in the proportion of relatively less attractive sectors.

This ETF focuses on global climate tech-related companies centered in the United States, Europe, and Korea. The expected composition includes low-carbon energy companies such as ▲General Electric (7%), ▲First Solar (7%), ▲CS Wind (3%), and infrastructure companies such as ▲Eaton (7%), ▲Quanta Services (6%), and ▲Schneider Electric (6%). It is a currency-exposed product with a total fee of 0.5% per annum.

Seobeomjin, Head of Strategy Solutions at Samsung Active Asset Management, said, “Climate tech is a representative industry with secured long-term growth potential for more than 10 years. Major companies that had poor performance due to rising interest rates and policy delays have shown an increase in order volumes since 2023. We expect that actual installation volumes will significantly increase in 2024, putting the industry on a solid growth path.” He added, “The KoAct Global Climate Tech Infrastructure Active ETF plans to actively manage with a long-term perspective in the climate tech industry, which is supported by policies and experiencing a turnaround in performance, moving away from investing in specific themes.”