Recently, as the domestic stock market surpassed the KOSPI 3000 mark and continued its bullish trend, market interest has been growing in the "Value-Up Program," a key policy for revitalizing the stock market. As part of the Value-Up Program last year, a total of 12 Korea Value-Up ETFs, simultaneously listed by 12 domestic asset management companies on the same day, have garnered attention by delivering outstanding returns in line with stock market revitalization policies.
On June 27, Samsung Active Asset Management announced that its "KoAct Korea Value-Up Active ETF" recorded a return of 27.3% since its listing in November last year, ranking first among the 12 Value-Up ETFs listed on the same day.
KoAct Korea Value-Up Active ETF uses the Korea Value-Up Index, published by the Korea Exchange, as its benchmark. It constructs its portfolio by carefully selecting 48 stocks, including top-performing companies within the Value-Up Index, companies expected to be included in the index, and companies related to shareholder activism. Currently, the sector allocation is 31.9% IT, 20.9% industrials, 18.9% financials, 13.5% consumer discretionary, and 5.5% healthcare.
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 a large number of companies with strong capital structures. In addition to market capitalization and trading volume, profitability and shareholder returns are also considered in its calculation. The five-step screening process examines not only dividends but also whether companies are conducting shareholder returns such as share buybacks and cancellations, which aligns with the new government's policy direction emphasizing expanded shareholder returns.
As the Value-Up policy enters its second year, the number of participating companies is gradually increasing. As of last month, 153 KOSPI companies had participated in Value-Up disclosures, accounting for 49% of the total market capitalization. With the continued implementation of the policy, pressure for increased shareholder returns is expected to intensify. If dividend increases and share cancellations become more widespread, there is significant potential for further gains in the Korea Value-Up Index.
From the time of its listing, KoAct Korea Value-Up Active ETF has demonstrated a differentiated strategy by actively investing in top-performing companies within the Value-Up Index, companies expected to be included in the index, and companies related to shareholder activism. Going beyond simply tracking the Value-Up Index, it has leveraged the advantages of an active ETF by flexibly adjusting its investment targets and allocations according to market conditions.
During the first regular rebalancing conducted on June 13, the ETF was able to capitalize on the strengths of an active ETF. Through proactive stock selection, it preemptively included 13 out of 27 index constituent stocks, benefiting significantly from capital inflows. Additionally, it allocated a higher weight to outstanding Value-Up stocks such as LS Electric, Wontech, and DoubleUGames compared to the index, enabling it to achieve higher returns during periods of index gains.
Of the 32 stocks removed from the Value-Up Index, the ETF held only four. This is analyzed as a result of utilizing the strengths of an active ETF to invest in clearly defined Value-Up companies, which translated into superior returns.
Nam Eunyoung, Head of Investment Team 1 at Samsung Active Asset Management, stated, "The Value-Up Index represents a collection of companies expected to see value appreciation based on rising earnings and shareholder returns, which aligns with government policy trends," adding, "It is expected to establish itself as a reliable means for participating in the domestic market rally."
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