Korea Investment Management Changes Name of 'ACE Fn5G Plus' ETF

Korea Investment Management announced on December 26 that it has changed the name of the ACE Fn5G Plus Exchange-Traded Fund (ETF), which invests in domestic technology stocks, to the ACE Korea AI Tech Core Industry ETF, and has also revised the criteria for calculating its underlying index.

The ACE Korea AI Tech Core Industry ETF was originally listed in April 2021 as the ACE Fn5G Plus ETF. It is a product that invests across the entire network convergence industry. To highlight its unique features, the representative keyword of the industry, "5G," was included in the fund name at the time of listing.

The change in listing was implemented to enhance the intuitiveness of the ETF's investment focus. For consistency with the constituent stocks, the underlying index name has been changed from "FnGuide 5G Plus Index" to "Fn Korea AI Tech Core Industry Index." The fund name was also changed from "ACE Fn5G Plus" to "ACE Korea AI Tech Core Industry."

There have also been changes to the composition of the constituent stocks. Previously, up to 30 stocks could be included, but with the revised listing, the number of constituent stocks has been reduced to 15. The upper limit for the weighting of individual stocks has also been increased from 8% to 20%. This adopts a methodology that allows for more concentrated investment in selected stocks.

The financial requirements, which are one of the main indicators for stock selection, have also been strengthened. Previously, stocks with a market capitalization of less than 200 billion won as of the stock selection date were excluded from the portfolio, but with the revision of the index calculation criteria, the market capitalization requirement has been raised to 500 billion won. This means that stocks must now meet higher financial soundness standards to be included in the portfolio compared to before.

An upper limit on the weighting of individual industries has also been added. As a measure to differentiate from existing domestic semiconductor ETFs, the weighting of the semiconductor industry in the ACE Korea AI Tech Core Industry ETF is limited to 15%.

Nam Yongsoo, Head of ETF Management at Korea Investment Management, explained, "We determined that the keyword '5G' no longer adequately represents the investment focus, so we changed both the index and fund name to enhance investment intuitiveness. During the relisting process, we raised the average market capitalization requirement to reduce small-cap risk, and in order to clarify the investment characteristics of the ACE Korea AI Tech Core Industry ETF, we imposed limits on the number of constituent stocks and the inclusion of specific industries."