On December 15, KB Asset Management announced that it will launch the strategic exchange-traded fund (ETF) "RISE Donghak Ant ETF" on December 16, which combines individual investor flows and price momentum.
The RISE Donghak Ant ETF is a product that organically incorporates the growing influence of individual investors in the stock market into its structure. It is also the first domestic ETF to directly use "Donghak Ant" in its product name.
This product constructs its portfolio by combining the top 20% of stocks based on individual net buying over the past month with top momentum stocks over the past 12 months (excluding the most recent month). By limiting the selection to companies with a market capitalization of at least 1 trillion won, it prevents an over-concentration in small-cap stocks while simultaneously reflecting both the strength of individual investor flows and momentum-based trends.
This approach is based on analysis showing that the flow of individual net buying has produced more stable results compared to the past, and that combining this with momentum persistence increases the potential for excess returns.
The portfolio is composed of up to 20 stocks each month based on individual investor flows and momentum criteria. Among the top 20% of stocks by individual net buying in the previous month, the target portfolios for the previous and current months are each weighted at 50%. Stocks selected in both periods are allocated a 10% weighting, while those selected only once are allocated 5%. This design aims to mitigate stock volatility while quickly capturing changes in market momentum.
As of December 12, the main investment stocks include: Hyundai Engineering & Construction (11.8%), Samyang Foods (9.8%), PharmaResearch (9.1%), LS ELECTRIC (5.4%), HD Korea Shipbuilding & Offshore Engineering (5.3%), HYBE (5.1%), and Hanwha Aerospace (5.1%).
The RISE Donghak Ant ETF applies monthly rebalancing based on research showing that a portfolio combining individual investor flows and momentum outperforms the market in short-term periods of one to two months. Its compact structure, with a limited number of stocks, helps reduce annual trading costs, while also enhancing the clarity of the strategy and the ease of index tracking.
Yook Donghui, Head of ETF Product Marketing at KB Asset Management, stated, "As the influence of individual investors grows, the RISE Donghak Ant ETF is the first example of directly reflecting changes in market structure within an ETF," adding, "With a monthly rebalancing strategy that reflects individual investor flows and momentum in near real time, it will serve as an efficient alternative in a rapidly changing market."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
