Korea Investment Management will list the ACE China AI Big Tech TOP2+ Active Exchange-Traded Fund (ETF) on July 29.
The ACE China AI Big Tech TOP2+ Active ETF is a product that invests in key companies related to artificial intelligence (AI) technology in China. It focuses approximately 25% of its investments each in leading companies from the AI hardware and software sectors. As of the listing date, the portfolio will include 'Xiaomi' (hardware), a promising AI company, and 'Alibaba' (software), the leading AI company in China.
The portfolio will consist of approximately 24 stocks. About 50% of the portfolio will be allocated to the two leading companies, while the remainder will be invested in companies expected to show growth in AI technology. The allocation per stock will be kept under 5%. When selecting stocks, indicators such as market capitalization within the industry and investment in research and development (R&D) will be considered.
As an active ETF, the ACE China AI Big Tech TOP2+ Active ETF aims to outperform its benchmark index, the Solactive China AI Big Tech TOP2+ Index (Price Return). This is why the ETF's portfolio composition differs from that of the benchmark index. The benchmark index consists of about 50 Chinese big tech companies listed on Chinese and Hong Kong exchanges, but the ETF portfolio may also include Chinese AI technology-related companies listed on U.S. exchanges, in addition to those listed in China and Hong Kong.
Korea Investment Management's information capabilities are also a strength. The company currently operates a research center in mainland China. Among domestic asset management firms, Korea Investment Management is the only one to operate a research center, not just a representative office, in China. Given the high level of information asymmetry in the Chinese market, the ability to accurately and quickly select stocks through a local research center is expected to contribute to the performance of the ACE China AI Big Tech TOP2+ Active ETF.
Oh Hyeyoon, Head of Overseas Business at Korea Investment Management, introduced the product by saying, "With the emergence of DeepSeek, Chinese technology stocks are being reevaluated, which is why we are launching the ACE China AI Big Tech TOP2+ Active ETF." She added, "Alibaba is solidifying its market dominance by applying AI technology to various platform businesses that are integral to the daily lives of Chinese people, such as e-commerce. Xiaomi is demonstrating growth potential in the autonomous driving and humanoid markets by utilizing AI technology."
The ACE China AI Big Tech TOP2+ Active ETF is a performance-based product, and principal loss may occur depending on investment results.
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