A new ETF (exchange-traded fund) is launching that allows investors to benefit not only from the growth potential of Samsung Electronics and SK Hynix but also from their shareholder return initiatives. The portfolio includes holding companies and value chain affiliates alongside Samsung Electronics and SK Hynix.
According to industry sources on the 30th, the 'KIWOOM SamsungSK GroupTOP4+' ETF will be listed next month on the 1st. This fund invests in 10 stocks closely related to the core businesses of Samsung and SK Group.
Among the 10 stocks, the four with the highest portfolio weightings are Samsung Electronics, SK Hynix, Samsung Electro-Mechanics, and SK Square. As of last month's 3rd, the base index composition allocated 25% each to Samsung Electronics and SK Hynix, and 15% each to Samsung Electro-Mechanics and SK Square. The fund also invests in Samsung Life Insurance, SK Inc., Samsung C&T, and others.
Ma Ji-hye, manager of the ETF Solutions Team at Kiwoom Asset Management, stated, "The Samsung Group and SK Group, which include Samsung Electronics and SK Hynix—companies that are expected to receive concentrated benefits during the AI (artificial intelligence) cycle," adding, "KIWOOM SamsungSK GroupTOP4+ functions as both a semiconductor ETF and a group stock ETF, offering stability and strong long-term investment appeal."
Another key point to note when investing in this ETF is that both Samsung Electronics and SK Hynix are actively expanding their shareholder return programs. Earlier, Samsung Electronics announced a shareholder return policy totaling up to 110 trillion won for this year. Meanwhile, SK Hynix is proceeding with the acquisition and cancellation of its own shares worth 40 trillion won.
Manager Ma analyzed, "Expanding shareholder returns could serve as a catalyst to revalue these two companies at levels comparable to global semiconductor firms." She further explained, "Companies holding stakes in these two firms will receive dividends, gaining cash reserves for both shareholder returns and M&A (mergers and acquisitions). This can also act as a driver for revaluing the stock prices of holding companies."
She added, "In particular, KIWOOM SamsungSK GroupTOP4+ has a relatively higher weighting in holding companies compared to other ETFs. It more comprehensively includes companies that are expected to benefit from the expanded shareholder returns of the two semiconductor giants."
Another advantage is that by investing alongside holding companies, the ETF portfolio increases exposure to Samsung Electronics and SK Hynix. Additionally, since the stock prices of these two companies and their affiliated holding companies often move together, investors can also benefit from this correlation.
Another distinguishing feature of this ETF is its investment in affiliates expected to gain from growth in the AI industry. Focusing on how major group conglomerates build and grow a single ecosystem through various related businesses, the fund includes Samsung Electro-Mechanics, Samsung E&A, SKC, and ISC in its portfolio.
As the AI industry expands, demand for substrates produced by Samsung Electro-Mechanics is also rising. Samsung E&A, a specialized EPC (engineering, procurement, and construction) company, is expected to benefit from Samsung Electronics' expansion of fabrication plants. SKC is being revalued after entering the glass substrate business. ISC, a subsidiary of SK Inc., is a specialist in sockets for semiconductor testing.
Manager Ma concluded, "This fund invests not only in semiconductors but also across the entire AI component ecosystem, offering the added advantage of benefiting from spillover effects."
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