Samsung Active Launches 'KoAct Korea Value-Up Active ETF' Reinterpreting Value-Up

The ‘Value-Up Active ETF,’ reflecting investor expectations for the Value-Up project, will be listed. It creates return ‘alpha’ by investing intensively in excellent companies within the Value-Up index while also discovering companies expected to be included in the Value-Up index and those related to shareholder activism.

Samsung Active Asset Management announced on the 4th that it will launch the ‘KoAct Korea Value-Up Active ETF,’ which reinterprets the Value-Up theme.

KoAct Korea Value-Up Active uses the Korea Value-Up Index, announced by the Korea Exchange last September, as a benchmark and carefully selects 37 stocks, including excellent companies within the Value-Up index, companies expected to be included in the Value-Up index, and companies related to shareholder activism, to compose its portfolio. The Korea Value-Up Index selects the intersection of stocks with high price-to-book ratios (PBR) and high return on equity (ROE). It includes many companies with excellent capital structures. This strategy is considered an improvement over the JPX Prime 150 Index, which selects the top 75 companies by equity spread and the top 75 companies by PBR, respectively.

To realize the advantage of concentrated investment in active ETFs, KoAct Korea Value-Up Active prioritized companies that announced plans to enhance corporate value while simultaneously considering ROE improvement and profit growth. The goal is to proactively invest by selecting currently excellent companies and those expected to grow profits in the future.

At the time of product listing, the portfolio consisted of 31 companies within the Value-Up index and 6 companies outside the index. The portfolio is differentiated from the Value-Up index with 19% in the financial sector, 16% in semiconductors, 13% in automobiles, and 11% in healthcare. Stocks included based on market capitalization or PBR were excluded from the portfolio, and stocks expected to be included in the Value-Up index, such as KB Financial and Hana Financial Group, were proactively included. Although there are only two bank stocks within the Value-Up index, four bank stocks were included because the banking sector is expected to grow in the mid-to-long term due to ROE improvement and active shareholder returns.

By differentiating the portfolio, the plan is to clearly demonstrate the competitiveness of the active ETF by achieving ‘+alpha’ returns compared to the existing Value-Up index.

The KoAct Korea Value-Up Active portfolio includes excellent stocks within the Value-Up index as well as companies expected to be included, such as ▲KB Financial ▲POSCO Future M ▲Naver ▲Hana Financial Group ▲HK Inno.N ▲Gamsung Corporation, which are excellent in profit growth and shareholder returns. The total expense ratio is 0.5% per annum, the lowest among similar active ETFs, and distributions are made quarterly.

Seobumjin, Head of Strategy Solutions at Samsung Active Asset Management, explained, “The Korea Value-Up Index will be a new opportunity for the intrinsic value of the Korean stock market to be properly evaluated, making it a very good investment opportunity for both institutions and individual long-term investors.” He added, “KoAct Korea Value-Up Active will provide outstanding investment performance by utilizing the differentiated portfolio and management method, which are advantages of active ETFs. We will do our best to demonstrate the true competitiveness of active ETFs.”