Samsung Active Asset Management "Dividend Growth ETF Surpasses 100 Billion KRW in Net Assets"

Samsung Active Asset Management announced on the 19th that the net assets of the ‘KoAct Dividend Growth Active Exchange-Traded Fund (ETF)’ reached 106.2 billion KRW. Including the additional 16 billion KRW set on the 15th, which has not yet been reflected in the net assets, the actual net assets exceed 120 billion KRW. This is a record achieved in just 14 trading days since its listing on the 27th of last month, highlighting the concentrated inflow of institutional funds exceeding 110 billion KRW.

The KoAct Dividend Growth Active ETF invests in companies judged to have the willingness and capability to increase shareholder returns through improved cash flow based on growth in Return on Equity (ROE), moving beyond simple low Price-to-Book Ratio (PBR) strategies. This concept was inspired by the ‘Corporate Value Enhancement Measures’ introduced by the Tokyo Stock Exchange last year. As this product was about to be launched, the government announced the ‘Corporate Value-Up Program,’ attracting significant attention from many investors.

As a result, individual investors’ net purchases reached 9.4 billion KRW within 14 days of listing, and institutional funds such as insurance companies and other corporations poured in over 110 billion KRW, earning the ETF the nickname ‘players’ ETF.’ It is analyzed that investment demand is concentrating on the KoAct Dividend Growth Active ETF as investors aim to preemptively select beneficiaries expected from the ‘Corporate Value-Up Program,’ which will be fully implemented in the second half of the year. In fact, while the KOSPI rose 1.46% after listing, this product increased by 3.41%, proving the competitiveness of its portfolio investment strategy.

The KoAct Dividend Growth Active ETF carefully selects companies with improving cash flow. It checks whether future profits are increasing and shareholder returns are growing, verifying not only dividends but also the capacity for share buybacks. It also selects companies with the capability to efficiently invest equity capital to generate profits, i.e., companies with increasing ROE, and finally analyzes and includes companies willing to improve shareholder returns by increasing the number of dividend payments and dividend yields.

Many aspects of these investment principles are similar to the government’s standards. Recently, the government revised the Stewardship Code to encourage pension funds’ participation in value-up company investments, which has accelerated the inflow of investment funds into this product.

Currently, the sectoral investment proportions of the KoAct Dividend Growth Active ETF are diversified with banks at 17%, automobiles at 13%, and chemicals at 10%. Nam Eun-young, a manager at Samsung Active Asset Management, said, “Currently, the high dividend yield and cash-generating ability have led to higher stock price increases in financial stocks such as banks, but in the future, diversified investment including stocks capable of more active shareholder returns or cash flow improvements is necessary.”

The KoAct Dividend Growth Active ETF portfolio includes 49 companies with excellent cash flow and shareholder returns as well as those with improvement prospects, such as ▲Hana Financial Group (8.3%), ▲Hyundai Motor Company (8.0%), ▲K Car (2.1%), and ▲Korea Electric Power Corporation (1.6%). The total expense ratio is 0.5% per annum.

Seo Beom-jin, Head of Strategy Solutions at Samsung Active Asset Management, stated, “True value-up companies are those that can increase shareholder return rates through dividend increases and share buybacks based on strong cash-generating capabilities. The KoAct Dividend Growth Active ETF plans to actively manage selected companies expected to improve shareholder returns and corporate value through the implementation of the Corporate Value-Up Program from a long-term perspective.”

Meanwhile, the KoAct Dividend Growth Active ETF is a quarterly distribution product, distributing dividends within 7 trading days based on the last trading day of January, April, July, and October.