[ETF Catch-up] ③ What Are the ETF Keywords That Match My Investment Style?

If Conservative, 'Bonds, Corporate Bonds, High Dividends'
If Aggressive, 'Energy, Electric Vehicles, Emerging Markets'

Editor's NoteAs recession signals strengthen, individual investors are growing increasingly anxious. Even if they want to invest, it is difficult to find suitable investment options. Although it is a high-interest-rate era, banks have lowered deposit rates under government pressure, which is unsatisfactory. The real estate market is in deep winter, requiring large sums of money, making it hard to take the plunge. At the same time, investing in individual stocks in the stock market does not bring peace of mind. For such investors, Exchange-Traded Funds (ETFs) are worth considering. Combining the advantages of stocks and funds, ETFs can be freely bought and sold in real time like stocks. Moreover, the lineup is diverse, ranging from products that gather multiple stocks like funds to those that track specific indices such as domestic and international stocks, bonds, real estate, commodities, infrastructure, and futures. Buying just one share of an ETF can provide the effect of diversified investment across multiple stocks.

[Asia Economy Reporter Kwangho Lee] Exchange-Traded Funds (ETFs) track various market indices, allowing investors to effectively invest in multiple stocks and products. Especially with a diverse product lineup, investors can easily select products that suit their preferences. We have selected ETFs with a high probability of generating returns from conservative, aggressive, and long-term perspectives.

For those with a conservative investment style, Samsung Asset Management’s ‘KODEX Short-Term Bond ETF,’ ‘KODEX Short-Term Bond PLUS ETF,’ and ‘KODEX KOFR Interest Rate Active ETF’ are suitable. Changgyu Choi, head of Samsung Asset Management’s ETF Consulting Division, said, “Since the risk of interest rate hikes remains, we currently recommend focusing on ultra-short-term or short-term bonds.”

Mirae Asset Global Investments recommends ‘TIGER 24-10 Corporate Bond (A+ or higher) Active (Grade 5)’ and ‘TIGER CD Interest Rate Investment KIS (Synthetic) (Grade 2).’ Jongwook Lim, head of Mirae Asset’s ETF Digital Solutions Team, explained about the corporate bond active ETF, “Even if market interest rates change during the investment period, holding until maturity allows realization of the initially targeted return.” Regarding the CD interest rate investment, he emphasized, “It is the only ETF in Korea that tracks the 91-day yield of negotiable certificates of deposit (CD), serving as a parking account in the ETF world.”

KB Asset Management offers ‘KBSTAR 25-11 Corporate Bond (AA- or higher) Active,’ ‘KBSTAR Short-Term Government and Public Bond Active,’ and ‘KBSTAR 200 High Dividend Covered Call ATM.’ Sujin Lee from the ETF Product Team explained, “It is advisable to maintain a product allocation of over 50% in bond-type ETFs with predictable income structures to achieve stable returns.”

Hanwha Asset Management recently listed the ‘ARIRANG Comprehensive Bond Active ETF.’ It minimizes exposure to market interest rate volatility to deliver predictable and stable performance. Additionally, the ‘ARIRANG 30-Year Treasury Bond Active,’ which focuses on long-term bonds that tend to rise significantly in price during interest rate declines, is recommended for conservative investors.

For investors with an aggressive investment style, ETFs containing keywords such as ‘energy,’ ‘electric vehicles,’ and ‘emerging markets’ are appropriate. Regarding energy, Samsung Asset Management’s ‘KODEX European Carbon Emission Futures ICE (H) ETF’ is representative. Head Choi analyzed, “Although energy prices have recently fallen sharply causing some hesitation, carbon neutrality is gradually becoming more visible, and price increases are expected.”

Mirae Asset Global Investments’ growth-oriented products ‘TIGER China Electric Vehicle SOLACTIVE (Grade 2)’ and ‘TIGER U.S. S&P 500 Dividend Aristocrats (Grade 2)’ are also notable. Team leader Lim explained, “These products invest in China’s electric vehicle industry value chain and companies within the U.S. S&P 500 index that have increased dividend payments for at least 25 years.”

KB Asset Management advises diversified investment focusing on long-term bonds with expectations of gradual market interest rate stabilization and capital gains, as well as ETFs related to representative U.S. and China indices that have price merits due to recent stock price adjustments and reopening expectations. Representative products include ‘KBSTAR KIS Treasury Bond 30-Year Enhanced,’ ‘KBSTAR U.S. S&P 500,’ and ‘KBSTAR China MSCI China (H).’

Hanwha Asset Management recommends ‘ARIRANG Emerging Markets MSCI Inverse (Synthetic H),’ which tracks about 20 promising overseas emerging market stock indices including China, Brazil, and India, along with ‘ARIRANG K Defense Fn,’ ‘ARIRANG Global DRAM Semiconductor iSelect,’ ‘ARIRANG Aerospace & UAM iSelect,’ and ‘ARIRANG U.S. Nasdaq Tech.’

◇Long-Term Investment Style: ‘Semiconductors, Nasdaq, ESG’

There are also ETFs suitable for those who want to bet from a long-term perspective. Samsung Asset Management highlights the ‘KODEX U.S. Semiconductor MV ETF.’ Head Choi explained, “The trend of technological hegemony related to semiconductors is strong, and semiconductors are essential for future technologies that will become mega trends such as the metaverse.”

Mirae Asset Global Investments advises that for long-term investments of over 30 years, low-cost, index-tracking strategies are best, recommending investment in the S&P 500, which can be considered a representative global economic index. A representative product is ‘TIGER U.S. S&P 500,’ which ranks second in net individual purchases (7.19 billion KRW) among stock-type ETFs.

KB Asset Management recommends products related to long-term growth themes such as semiconductors, Nasdaq, and ESG. Representative ETFs include ‘KBSTAR Large Cap High Dividend 10 TR,’ ‘KBSTAR ESG Socially Responsible Investment,’ ‘KBSTAR U.S. Nasdaq 100,’ and ‘KBSTAR Global Clean Energy S&P.’

Hanwha Asset Management lists ‘ARIRANG TDF Active ETF 4 types,’ ‘ARIRANG Apple Bond Mixed Fn,’ and ‘ARIRANG High Dividend Stock Bond Mixed’ as representative long-term investment ETFs. Particularly popular is the ‘ARIRANG Apple Bond Mixed Fn,’ which invests in the growth potential of Apple, a global icon of innovative growth, and the stability of bonds.

Meanwhile, when investing through retirement pension accounts such as Individual Retirement Pensions (IRP), it is advisable to choose overseas stock-type ETFs. This is a tax-deferred concept, with some pension income tax incurred upon pension receipt. For domestic stock-type ETFs, it is advantageous to use entrusted accounts such as Comprehensive Asset Management Accounts (CMA) to avoid taxation on capital gains from stock price increases.

This content was produced with the assistance of AI translation services.