Kiwoom to List 'Korean SPMO' ETF Selecting Only S&P500 Winners on the 9th

Top 100 Momentum Stocks Over the Past 12 Months Selected
An Investment Strategy Suited for the Winner-Takes-All Economy

Kiwoom Asset Management announced on December 5 that the "KIWOOM US S&P500 Momentum ETF" will be newly listed on the Korea Exchange on December 9.

This ETF is the Korean version of SPMO, the leading momentum strategy ETF in the United States. By tracking the same benchmark index as SPMO, the "S&P500 Momentum Index," it is designed to allow domestic investors to utilize the same strategy that has been managed in the US market for over 10 years and has consistently outperformed the S&P500.

The KIWOOM US S&P500 Momentum ETF employs a momentum strategy that selects and includes the top 100 S&P500 stocks with the highest returns over the past 12 months, providing an automatic focus on the stocks showing the strongest trends in the market.

Based on the momentum score (recent 12-month return divided by volatility), the ETF selects the 100 stocks with the strongest trends and applies a momentum-weighted method, assigning higher weights to stocks with higher momentum. As a result, the allocation to high-performing stocks naturally increases, offering the potential for long-term outperformance compared to the S&P500.

Considering the unique characteristics of the US market, where leading sectors continuously change according to market conditions and economic cycles, the ETF is structured to automatically shift its allocation to the strongest trending sectors without any sector constraints. Data on sector performance over the past 10 years also clearly demonstrates the effectiveness of the momentum strategy, as sectors that performed well one year often continued to lead in the following year.

By utilizing "volatility-adjusted momentum" rather than simple price appreciation, the ETF automatically excludes stocks with excessive volatility or those experiencing sharp declines. This provides a defensive effect, with the potential to record lower maximum drawdowns (MDD) compared to the S&P500 during market downturns.

Lee Kyungjun, Head of ETF Management at Kiwoom Asset Management, introduced the S&P500 momentum strategy as "a structure that most quickly reflects market changes, allowing for early entry into leading stocks during bull markets and naturally reducing exposure to high-risk stocks during corrections." He added, "A major strength is that, through a simple and intuitive rule-based approach, the ETF selectively invests in only the 'winners' within the S&P500."

He further explained, "In the current market environment, where the winner-takes-all structure centered on big tech is becoming more pronounced, this momentum strategy is the most suitable investment approach, as it captures growth opportunities while also enabling risk management."