Outstanding active management metrics
Sharpe ratio of 1.83 and 62% hit ratio over the past year
Portfolio rebalanced in line with shifts in the AI ecosystem
Korea Investment Management announced on the 27th that the ACE Apple Value Chain Active Exchange Traded Fund (ETF) has surpassed a cumulative return of 80% since its listing.
According to fund evaluator FnGuide, as of the previous day's closing price, the post-listing return of the ACE Apple Value Chain Active ETF stands at 83.06%. Over the same period, the share price of Apple (AAPL), which is listed on the Nasdaq as a single stock, rose about 28.12%.
The one-year return is 74.99%, which is 50.2 percentage points higher than its benchmark index (BM). The six-month and year-to-date returns are 59.69% and 24.04%, respectively, achieving excess returns of 43.57 percentage points and 19.25 percentage points over the BM.
Indicators used to measure the performance of active management are also strong. Over the past year, the Sharpe ratio was 1.83, exceeding the benchmark's 1.56 and showing higher efficiency for the same level of volatility. Jensen's Alpha, which represents additional performance relative to market returns, came in at 12.74, while the Information Ratio, which measures excess return relative to tracking error, was 0.43, demonstrating stable management capabilities.
The hit ratio for the past year was 62%. The hit ratio represents the proportion of periods within one year in which the fund outperformed its BM. A 62% probability of excess return can be interpreted as steady and effective management performance.
The strong performance of the ACE Apple Value Chain Active ETF was mainly driven by Apple's robust earnings and the strength of key stocks in Apple's core supply chain, such as semiconductors and optical communications. Thanks to strong demand for the iPhone 17 series, Apple announced that it achieved a record high revenue of 143.007 billion dollars (about 206 trillion won) in the first quarter of its most recent fiscal year (October to December). The share price gains of key companies in the value chain responsible for large-cap memory and foundry, optical communications, components, back-end processing, and automotive electronics components also supported the fund's returns.
With Apple’s new product launch event scheduled for the first week of March and the likelihood of unveiling the iPhone 17e increasing, Apple is expected to stimulate replacement demand among value-conscious consumers by freezing product prices while equipping the device with a flagship-level application processor (AP) and MagSafe functionality. In particular, the adoption of a high-performance AP is expected to drive up unit prices for semiconductors and major components, and the overall earnings outlook for Apple’s supply chain companies is also seen improving.
Lee Sunghoon, portfolio manager and head of the Global Strategy Management Division at Korea Investment Management, said, "The ACE Apple Value Chain Active ETF is an efficient vehicle that allows investors to gain exposure at once to Apple, one of the world's largest companies by market capitalization, as well as to the core components and equipment ecosystem across Korea, the United States, and Japan." He added, "Companies included in the Apple value chain enjoy high earnings visibility through long-term supply contracts and recurring orders, and are simultaneously benefiting from a re-rating of their share prices."
He went on to say, "Recently, we have expanded the investment universe into the realm of cooperation between hardware and AI software by including Alphabet, which has decided to integrate Google Gemini into Siri, and suppliers of test equipment for Apple Silicon chips," adding, "We have completed a strategic rebalancing to proactively respond to the strengthening of Apple’s product competitiveness and the ongoing reconfiguration of its supply chain."
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