Samsung Active Asset, KoAct US Natural Gas Infrastructure Active ETF Listed

Samsung Active Asset Management announced on the 10th that it will list the 'KoAct US Natural Gas Infrastructure Active' ETF, the first in Korea to invest in the US natural gas industry. This is the ninth ETF under the 'KoAct' brand.

The KoAct US Natural Gas Infrastructure Active ETF invests across the entire value chain of the US natural gas infrastructure. It invests not only in upstream companies involved in exploration, development, and production but also in midstream companies engaged in gas liquefaction and transportation, as well as downstream companies that deliver or use natural gas for end consumers. The focus is on the midstream sector, which is linked to overall volume movement rather than natural gas price fluctuations.

Since the election of President Donald Trump, who tends to actively utilize traditional energy industries rather than focusing on renewable energy sectors such as solar and wind that emphasize decarbonization, market interest in the natural gas industry, which has relatively lower carbon emissions among existing energy sources, has increased. Considering this situation, the KoAct US Natural Gas Infrastructure Active ETF, launched as the first natural gas-specialized ETF in Korea, plans to quickly focus and selectively invest in companies within the US natural gas industry that are expected to have high growth potential.

Amid rapidly increasing electricity demand in the US due to various factors such as electric vehicles, AI, and data centers, the US Energy Information Administration (EIA) forecasts that the share of electricity generation from natural gas will increase along with overall power generation. In 2022, the EIA projected an average annual growth rate of 2.6% in US electricity demand over the next five years but revised this estimate upward to 4.7% within just one year. Globally, as coal power plants are being replaced by gas power plants to reduce carbon emissions, the US is leading this trend most rapidly. The share of coal power generation in the US decreased from 25.9% in 2021 to 19.4% in 2023, while the share of gas power generation rose from 39.5% to 45.1% during the same period, demonstrating that natural gas is quickly replacing coal.

Samsung Active Asset Management expects the US natural gas industry to benefit comprehensively and believes it is necessary to maintain a high investment proportion in the midstream sector, which is expected to show positive performance due to increased usage regardless of natural gas price movements. It also positively evaluated that midstream companies are well known for their high shareholder return rates even within the US.

The KoAct US Natural Gas Infrastructure Active ETF's portfolio is centered on natural gas midstream companies such as Enbridge, Kinder Morgan, TC Energy, ONEOK, and Williams Companies. Since these companies exhibit high dividend payout tendencies, the ETF plans to pay monthly distributions, with a total expense ratio of 0.5% per annum.

Seobumjin, Head of Strategy Solutions at Samsung Active Asset Management, said, "We anticipate deregulation and favorable policies for the natural gas industry," adding, "We are introducing the KoAct US Natural Gas Infrastructure Active ETF, which proactively invests in US companies that can benefit from these trends, as the first of its kind in Korea."

He continued, "By leveraging Samsung Active Asset Management's solid corporate research and active management expertise, we will invest in and manage this product from a long-term perspective to generate excess returns."