Increased Volatility in the Korean Stock Market and Investment Trends
The Korean stock market's recent surge in volatility has led to a sharp decline in investor deposits, alongside reaching new peaks in margin debt balances. Amid this backdrop, bond-related ETFs have emerged as a preferred safe asset, experiencing substantial net inflows. This trend suggests a heightened preference for safe assets amidst market instability.
Although interest in U.S. stocks from Korean investors remains robust, recent market corrections have slightly reduced net purchases. Particularly, technology stocks continue to attract considerable attention, influenced by optimistic prospects regarding the tech industry's growth potential.
In the ETF market, safe assets are gaining popularity, with gold-based ETFs also drawing interest. Meanwhile, increased volatility in the KOSPI index has spurred active leverage investments and bargain buying. These investment patterns reflect the moves of aggressive investors willing to take risks. Daishin Securities anticipates the continuation of current market adjustments, which is steering investors towards newly attractive sectors.
Shinhan Asset Management's SOL US NextTech TOP10 ETF: A Focus on Next-Gen Growth Themes
Shinhan Asset Management's 'SOL US NextTech TOP10 Active ETF' has surpassed 50 billion won in net assets just one month after its launch. This ETF has gained attention due to its concentrated investment in next-generation growth themes such as quantum computing, drones, and AI infrastructure. Amid expectations of interest rate cuts and structural shifts driven by AI expansion, there is significant capital inflow into small and medium-sized tech stocks, with Snowflake, IonQ, and Cloudflare being key holdings.
The ETF's distinctive feature lies in its investment strategy, which adapts to the transforming market environment. The anticipation of interest rate reductions and the proliferation of AI megatrends are accelerating technological innovations among corporations, allowing the ETF to harness a differentiated competitive edge. Even amidst market adjustments, positive performance in memory semiconductors and optical module companies further enhances investor sentiment towards this ETF.
Meanwhile, Korea Investment Management's AI-related ETF products are also gaining rapid popularity. The 'ACE US AI Tech Core Industry Active' ETF has surpassed 100 billion won in cumulative net individual purchases within just 14 days, indicating high investor interest due to its active-weighting feature adjusting investments across key sectors of AI technology, computing infrastructure, and more.
Significant Outflow from U.S. Dividend Growth ETF
A significant outflow of funds is being observed from the U.S. Dividend Growth ETF, Schwab U.S. Dividend Equity (SCHD). Despite the overall rise in U.S. stock markets this year, SCHD has maintained a lower performance as it primarily invests in value stocks, contrary to the current bullish trend toward technology stocks. Over the past six months, approximately $1.93 billion has flowed out of SCHD, placing it at the bottom ranks in terms of net inflow among 3,243 ETFs.
This outflow is attributed to the underperformance or negative returns of energy and healthcare-related stocks included in SCHD's portfolio. Compare that with the recent surge in AI-related tech stocks, investors appear more optimistic about the potential returns from AI stocks. Consequently, many experts are advising an asset allocation toward safe-haven assets like gold.
TIGER REIT Real Estate Infrastructure ETF Sets Record as Largest Domestic REIT ETF
Mirae Asset Global Investments' 'TIGER REIT Real Estate Infrastructure ETF' has achieved a milestone with assets totaling 1.0313 trillion KRW, making it the largest domestic REIT ETF. Since its inception in 2019, this ETF has invested in various infrastructure and REIT assets, achieving an impressive 17.2% return since the beginning of 2023. A key to its attractiveness is the low expense ratio of 0.1587%, making it more favorable compared to competing products. Moreover, the ETF offers stable monthly dividends, providing investors with consistent income, and plans to enhance dividend transparency guidance starting in March next year.
Recently, interest in REIT ETFs has surged as investors aim to mitigate the burden from rising dividend stocks while seeking stable returns. Investors are particularly drawn to the TIGER REIT Real Estate Infrastructure ETF due to its relatively low costs, high returns, and predictable dividend income.
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