TIGER Holding Company ETF Records 39% Return Year-to-Date

Mirae Asset Global Investments announced on May 30 that the "TIGER Holding Company ETF" has recorded a return of approximately 39% since the beginning of the year.

According to Koscom ETF Check, as of May 29, the year-to-date return of the TIGER Holding Company ETF stands at 39.1%. The ETF, which has maintained an upward trend this year due to value-up policies, has recently surged, buoyed by presidential candidates' pledges to improve corporate governance. The return over the past month alone has reached 29.9%.

The TIGER Holding Company ETF invests in 30 holding company stocks announced by the Korea Fair Trade Commission in the KOSPI market. Excluding financial holding companies and intermediate holding companies, its main investment stocks as of May 29 include Hanjin KAL (14.5%), HD Hyundai (10.0%), SK (9.1%), Doosan (9.0%), and LG (7.6%). The average price-to-book ratio (PBR) of these companies is 0.63, indicating strong pressure to enhance corporate value.

Ahead of the presidential election, a series of pledges to boost the stock market have been announced, leading to a rise in the stock prices of holding companies that had remained undervalued for a long period. Pledges to improve corporate governance, which has been cited as a major cause of the Korea Discount in the Korean stock market, are raising expectations for enhanced fiduciary duty to shareholders and greater transparency in corporate governance. These initiatives are also expected to lead to shareholder returns such as treasury stock cancellations and increased dividends, which in turn are anticipated to boost corporate stock prices.

If the amendment to the Commercial Act is pursued again, companies are expected to actively implement shareholder-friendly policies, further increasing interest in the TIGER Holding Company ETF. Although holding companies have long been undervalued due to factors such as treasury stock cancellations and governance structure, if the Commercial Act amendment eliminates these discount factors, valuation improvement (PBR increase) is anticipated.

Jung Hyun Jeong, Head of ETF Management Division at Mirae Asset Global Investments, stated, "With the amendment to the Commercial Act, the rights of minority shareholders will be significantly strengthened, and holding companies will face greater pressure to return value to shareholders through measures such as increased dividends and treasury stock cancellations. If the reduction of the holding company discount becomes a reality, we expect investors to fully benefit from this through the 'TIGER Holding Company ETF,' the only holding company investment ETF in Korea."