KB Asset Management: "Now Is the Right Time to Invest in the RISE Donghak Ant ETF"

As the KOSPI index continues its unstoppable upward trend, surpassing 4,700 for the first time in history, there is growing interest in strategy-based products that simultaneously reflect both individual investor trading directions and price trends.

On January 14, KB Asset Management recommended the 'RISE Donghak Ant ETF', an exchange-traded fund (ETF) that organically incorporates individual investor demand into its product structure. It is also notable as the first domestic ETF to directly use 'Donghak Ant' in its product name.

The RISE Donghak Ant ETF constructs its portfolio by combining the top 20% of stocks by individual net buying over the past month with the top stocks by price momentum over the past 12 months (excluding the most recent month). The selection is limited to stocks with a market capitalization of at least 1 trillion won, preventing a concentration in small-cap stocks. This approach is based on the analysis that combining the stability of individual net buying flows with the sustainability of a momentum strategy increases the potential for excess returns.

The portfolio is composed of up to 20 stocks each month, based on individual demand and momentum criteria. Among the top individual net buying stocks from the previous month, those selected for both the previous and current month's target portfolios are included at a 10% weighting, while those selected only once are included at a 5% weighting. This method mitigates stock volatility while enhancing responsiveness to market trend changes.

Key investment stocks include Hanwha Ocean (10.58%), Doosan Enerbility (9.53%), Hanwha Aerospace (5.47%), Hanwha (5.38%), Korea Electric Power Corporation (5.19%), Simmtech (5.17%), Koh Young Technology (5.11%), HD Hyundai Heavy Industries (5.08%), Hyundai Rotem (5.03%), and Samsung Heavy Industries (5.03%). It is characterized by the inclusion of many stocks that have attracted significant individual investor demand, particularly in sectors such as defense, shipbuilding, and energy, which have recently driven the KOSPI's upward momentum.

Performance has also been positive. Since its listing, the return has reached 22.4%, and the return since the beginning of the year stands at 19.6%. There is an assessment that the effectiveness of the individual demand and momentum strategy has been demonstrated in this rising stock market phase.

Yook Donghui, Head of ETF Product Marketing at KB Asset Management, introduced the product by saying, "The RISE Donghak Ant ETF is composed of 'hidden gem' companies selected by smart individual investors, and features a monthly rebalancing strategy that allows for relatively quick reflection of individual demand and price trends."

He added, "In a situation where the domestic stock market's upward momentum continues, it will be possible to prove that the choices of individual investors are being recognized."