KIWOOM US Crude Oil & Energy Companies ETF Invests Heavily in ExxonMobil and Chevron

Kiwoom Asset Management announced on January 7 that its exchange-traded fund (ETF), the 'KIWOOM US Crude Oil & Energy Companies ETF,' is the only energy ETF listed in Korea that directly holds physical shares, investing in ExxonMobil and Chevron, the two largest oil companies in the United States.

Amid the recent situation in Venezuela, there is a growing outlook that US energy companies will benefit in the medium to long term across the entire spectrum of production, refining, and oilfield services.

In overseas financial markets, analysts are increasingly suggesting that the geopolitical changes surrounding Venezuela could lead not only to short-term oil price fluctuations, but also to a restructuring of the US-centered energy supply chain and an expansion of infrastructure investment. There are rising expectations that US energy companies, which suffered asset losses during Venezuela's past nationalization process, will be able to recover asset value and secure new investment opportunities at the same time.

Industry experts believe that if US companies' technological capabilities and capital strength are fully leveraged during the normalization of local production and infrastructure reconstruction in Venezuela, this could lead to medium- to long-term improvements in performance and a revaluation of corporate value.

The KIWOOM US Crude Oil & Energy Companies ETF is a product that diversifies investments across more than 110 leading US crude oil and energy companies, weighted by market capitalization, and is designed to capture the structural benefits across the entire US energy sector. It tracks the MSCI US IMI Energy 25-50 Index and is the only ETF in Korea that invests physically in US energy company stocks rather than derivatives.

Physical ETFs have the advantage of relatively lower tracking error compared to synthetic products based on derivatives, and offer a clear structure for the allocation of distributions and dividend income. US energy companies are known for their high dividend yields. The ETF's underlying index also showed a high average dividend yield of about 3.8%.

As of January 6, the top five holdings are: ▲ExxonMobil (22.16%), the largest US energy supermajor engaged in oil and natural gas exploration, production, refining, and petrochemicals; ▲Chevron (14.81%), the second-largest US supermajor and the only major US energy company directly operating in Venezuela; ▲ConocoPhillips (5.97%), a leading independent exploration and production company; ▲Williams (3.78%), a US infrastructure company focused on natural gas; and ▲Schlumberger (3.13%), the world’s largest oilfield services company.

Oh Dongjun, Head of ETF Management at Kiwoom Asset Management, stated, "The Venezuela situation is being evaluated as a turning point that goes beyond a short-term event, enabling US energy companies to further strengthen their leadership in the global energy market." He added, "The KIWOOM US Crude Oil & Energy Companies ETF is expected to benefit structurally from the changes in the US energy sector brought about by geopolitical shifts, as well as offer stable, high dividends."