Shinhan Asset Management, 'SOL Joseon TOP3 Plus'... "No.1 6-Month Return"

Shinhan Asset Management announced on the 21st that the ‘SOL Joseon TOP3 Plus’ exchange-traded fund (ETF) recorded returns of 11.63% and 57.31% over 1 month and 6 months respectively as of the 20th of this month, ranking first among all domestic ETFs. The 3-month return is also 25.30%.

Kim Jeong-hyun, head of the ETF Business Division at Shinhan Asset Management, said, “While sectors such as semiconductors, secondary batteries, and bio have experienced volatility due to market fluctuations, the shipbuilding sector has shown the most consistent growth in the domestic stock market this year in terms of both short- and long-term returns.” He added, “With solid performance backing the domestic shipbuilding industry, various momentum-boosting events are expected, including the anticipation of U.S. military ship MRO (maintenance, repair, and overhaul) orders driven by the arms race between the U.S. and China, and increased demand for LNG vessels due to the U.S. LNG project, making it a sector worth continuous attention.”

Amid increased volatility in the domestic stock market due to U.S. interest rate cuts and recession signals, the SOL Joseon TOP3 Plus ETF’s returns have outperformed the KOSPI index (which recorded -4.33%, -1.84%, and -0.22% over 1, 3, and 6 months respectively). This performance is attributed to the balanced rise of the five shipbuilding companies that make up about 80% of the portfolio. As of the 19th of this month, the 6-month return of HD Korea Shipbuilding & Offshore Engineering, which holds the largest investment weight, reached 66.78%, while Samsung Heavy Industries (47.74%), Hanwha Ocean (38.8%), HD Hyundai Heavy Industries (90.26%), and HD Hyundai Mipo (48.94%) all recorded high growth rates.

Kim said, “The shipbuilding sector is also classified as a beneficiary industry in the upcoming U.S. presidential election, one of the biggest events in the domestic market in the second half of the year.” He explained, “Despite differences in the two candidates’ views on energy sources, demand for LNG is expected to continue, and the sustained market need for LNG vessels is positive for the domestic shipbuilding industry.”

The SOL Joseon TOP3 Plus ETF is the only domestic ETF focused on shipbuilding, attracting interest from both individual and institutional investors. Since the beginning of the year, it has grown its net asset size more than 20-fold to 338.8 billion KRW in just eight months. The portfolio consists of 13 stocks, with over 80% allocated to the three major shipbuilders?HD Korea Shipbuilding & Offshore Engineering, Samsung Heavy Industries, and Hanwha Ocean?as well as HD Hyundai Heavy Industries and HD Hyundai Mipo. Other holdings include equipment companies such as HD Hyundai Marine Solutions, Hanwha Engine, Korea Carbon, HD Hyundai Marine Engine, Dongsung FineTec, Taekwang, Hi-Lok Korea, and Sejin Heavy Industries.