Korea Investment Management announced on July 15 that the combined net asset value of its two exchange-traded funds (ETFs) investing in companies focused on enhancing shareholder value has surpassed 100 billion KRW. The two ETFs in question are the ACE Shareholder Return Value Equity Active ETF and the ACE Life Asset Shareholder Value Active ETF.
According to the Korea Exchange, as of July 14, the combined net asset value of the ACE Shareholder Return Value Equity Active ETF and the ACE Life Asset Shareholder Value Active ETF stood at 113.2 billion KRW. By product, the ACE Shareholder Return Value Equity Active ETF accounted for 65 billion KRW, while the ACE Life Asset Shareholder Value Active ETF totaled 48.2 billion KRW.
Both products incorporate shareholder return-related indicators when selecting stocks for inclusion. The ACE Shareholder Return Value Equity Active ETF, listed in November 2022, evaluates factors such as financial health, shareholder return growth potential, and corporate competitive advantage to include undervalued mid-cap companies. The ACE Life Asset Shareholder Value Active ETF, listed in October 2024, builds its portfolio with large-cap value stocks that have the potential to enhance corporate value and improve shareholder value.
A look at the top holdings reveals differences between the two products. The ACE Shareholder Return Value Equity Active ETF includes SeAH Steel Holdings (9.51%), Youngone Holdings (8.57%), SK Gas (6.84%), DoubleUGames (6.62%), and SeAH Steel (6.47%). The ACE Life Asset Shareholder Value Active ETF holds DN Automotive (7.57%), Orion (6.48%), BNK Financial Group (6.07%), Samsung Electronics (5.25%), and Samsung C&T (5.09%). Utilizing these two products allows investors to target shareholder value-enhancing companies ranging from small and mid-cap stocks to large-cap stocks.
Expectations for increased shareholder returns have grown, especially with the passage of the Commercial Act amendment, and individual investors' interest continues to rise. Since the beginning of this year, individual investors have made net purchases of 25.3 billion KRW in the ACE Shareholder Return Value Equity Active ETF and 8.8 billion KRW in the ACE Life Asset Shareholder Value Active ETF. Notably, the net purchase amount by individual investors in the ACE Shareholder Return Value Equity Active ETF was the highest among 18 shareholder value and value-up ETFs.
Jung Sangjin, Head of Equity Management at Korea Investment Management, stated, "With the passage of the Commercial Act amendment and other government policies aimed at boosting the domestic stock market, companies' moves to expand shareholder returns are expected to strengthen further. As undervalued value stocks with room to increase shareholder returns are likely to show strong stock price performance, the ACE Shareholder Return Value Equity Active ETF and the ACE Life Asset Shareholder Value Active ETF are worth paying attention to."
It should be noted that ACE ETFs are performance dividend-type products, and principal loss may occur depending on investment results.
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