Samsung Active Asset Management Launches Active ETF Brand 'KoAct'

Samsung Active Asset Management has launched an active ETF brand called 'KoAct,' separate from Samsung Asset Management's exchange-traded fund (ETF) brand Kodex. Active ETFs are products that combine the characteristics of both active funds and ETFs. Unlike passive ETFs that simply track a benchmark index, fund managers adjust the investment stocks and weights.

On the 3rd, Samsung Active Asset Management held a press conference to commemorate the launch of the active ETF brand KoAct. KoAct is an abbreviation of 'Korea Active ETF,' symbolizing the ambition to grow into Korea's representative active ETF brand.

Samsung Active Asset Management stated, "With the launch of this independent active ETF, we will consolidate the know-how and management capabilities we have accumulated so far to introduce various active ETF products and optimal portfolios, thereby contributing to the growth of our clients' assets."

The A.C.T. in KoAct reflects the company's vision of important future changes: Aging Society, Climate Crisis, and Technology. The plan is to create ETFs essential to these trends and provide them to investors.

As of the end of June 2023, the U.S. ETF market size is approximately KRW 9600 trillion (USD 7.34 trillion), with active ETFs accounting for 5.7%, or about KRW 540 trillion. Among the 622 ETFs newly listed since 2022, active ETFs represent 65.8%, or 409 ETFs, showing rapid growth.

The global ETF market shows a similar trend. The global ETF market size is about KRW 13,000 trillion (USD 9.97 trillion), with active ETFs accounting for KRW 723 trillion, or 5.6%. Among the 1,275 ETFs newly listed since last year, 740 are active ETFs, making up 58% of the total.

In contrast, the active ETF market size in Korea remains relatively small. Although the total ETF market has grown to KRW 100 trillion in 21 years since the first product launch, the stock-type active ETF market accounts for only about 2%, approximately KRW 2 trillion. However, the Korean ETF market is expected to follow global trends, with the number and size of active ETF listings rapidly increasing.

Market experts forecast that the total domestic ETF market size will expand to KRW 300 trillion by 2030. Considering the growth trend of the global ETF market, including the U.S., Samsung Active Asset Management expects the market share of stock-type active ETFs to rise sharply to around 10%, or KRW 30 trillion, by 2030.

Min Sua, CEO of Samsung Active Asset Management, said, "With the launch of KoAct ETFs, Samsung Active Asset Management will engage in more intensive deliberation and proactive investment to help our clients' assets grow alongside the changes in the world. Through this process, we will lead the domestic active ETF market to grow to a global level."

Samsung Active Asset Management's first active ETF product is the ‘KoAct BioHealthcare Active.’ It is Korea's first biohealthcare active ETF, selectively investing in biohealthcare companies expected to achieve high growth through technological convergence in the AI era. This product will construct its portfolio based on the iSelect BioHealthcare PR Index, with stocks carefully selected through Samsung Active Asset Management's research.

The reason for launching the biohealthcare active ETF as the first product is the high growth potential of the bio and healthcare sectors. The global healthcare market in 2023 is rapidly growing to about KRW 2,370 trillion, with promising fields including next-generation technologies applied to anticancer drugs, Alzheimer's and obesity treatments, and aesthetic medical devices. In particular, domestic companies have global competitiveness in the biohealthcare industry integrated with digital technologies.

Seobum Jin, Head of Strategy Solutions at Samsung Active Asset Management, said, "Along with the benefits of healthcare industry growth due to the aging society, and considering the peak interest rate situation and increasing liquidity, the biohealthcare sector, which had been stagnant after COVID-19, is expected to improve. The KoAct BioHealthcare Active ETF selectively invests in domestic biohealthcare companies with global competitiveness, and we recommend investors choose it for diversification purposes."

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