Samsung Asset Management: "The Key ETF Investment Theme for the Second Half is 'Rally'"

Samsung Asset Management announced on the 17th that it has selected ‘R.A.L.L.Y’ as the ETF investment keyword that investors should pay attention to in the second half of this year. The keyword ‘Rally’ was chosen with the hope that the upward trend will continue in the second half, fueled by the strong rebound in technology stocks such as Nasdaq and KOSDAQ during the first half of the year.

The investment keyword ‘R.A.L.L.Y’ consists of five areas: ‘Renewable Energy’, ‘Artificial Intelligence (AI)’, ‘Large-cap’, ‘Long-term Bond’, and ‘Yield hunting’.

First, renewable energy relates to sectors such as secondary batteries, solar power, wind power, and carbon reduction. As global consensus grows on the need to address the climate crisis, policies and agreements related to renewable energy are continuously increasing in major advanced countries such as the European Union (EU) and the United States. Demand for renewable energy is also rising due to geopolitical risks stemming from the Russia-Ukraine war. Meanwhile, with the expected expansion of electric vehicle penetration, benefits to electric vehicles and core materials for secondary batteries are expected to continue in the second half. Related ETFs include ▲KODEX Secondary Battery Core Materials 10Fn, ▲KODEX Secondary Battery Industry, ▲KODEX K-Renewable Energy Active, and ▲KODEX Tesla Value Chain FactSet.

Artificial intelligence is also an investment area to watch continuously in the second half of 2023. Facing labor shortages due to population aging and declining birth rates, the shift to unmanned and automated systems has become an inevitable trend. The AI semiconductor demand sparked by ChatGPT is expected to continue in the second half. Benefits are expected to be concentrated among leading fabless, equipment, and back-end companies. Additionally, due to the ongoing US-China trade dispute, semiconductor companies in South Korea, Japan, and Taiwan are expected to continue to enjoy spillover benefits in the second half. ETFs to consider include ▲KODEX US Semiconductor MV, ▲KODEX Asia Semiconductor Supply Chain ex-China Active, and ▲KODEX Fn System Semiconductor.

Next is large-cap stocks. In 2023, the global stock market has been driven by specific sectors and stocks, and this phenomenon is expected to continue in the second half. A strategy focusing on large-cap stocks in major country benchmark indices is expected to remain effective. Related ETFs include ▲KODEX US FANG Plus (H), ▲KODEX Fn Top 10 Equal Weight, ▲KODEX India Nifty 50, and ▲KODEX Japan TOPIX 100.

Among bond ETFs, long-term bonds are attracting attention. Recently, with the slowdown in the rise of the US Consumer Price Index (CPI) and Producer Price Index (PPI) and prevailing expectations of peak interest rates, investing in long-term bonds has become advantageous. Strategies such as investing in US and domestic long-term (30-year maturity) government bonds to seek capital gains from interest rate declines or pursuing long-term high-interest income through maturity-matching domestic investments are expected to be effective. Among Samsung Asset Management’s bond ETFs, those with long duration such as ▲KODEX US Treasury Ultra 30-Year Futures (H), ▲KODEX Government Bond 30-Year Active, and ▲KODEX 53-09 Government Bond Active are worth noting.

Finally, yield hunting, which can secure a safety margin, is important. Since global stock markets still exhibit high volatility, asset allocation and securing a safety margin are essential elements for investment in the second half. Income strategies using US dividend growth stocks and covered call strategies, as well as safety margin (cash) securing strategies using risk-free benchmark interest rates and ultra-short-term rates, are expected to be effective. Related ETFs include ▲KODEX US Dividend Premium Active, ▲KODEX US S&P 500 Dividend Aristocrats Covered Call (Synthetic H), ▲KODEX US Dollar SOFR Rate Active (Synthetic), and ▲KODEX CD Rate Active (Synthetic).

Kim Do-hyung, Head of ETF Consulting at Samsung Asset Management, said, “Following the ETF investment keyword ‘R.A.B.B.I.T’ selected at the beginning of the year, we analyzed sectors suitable for continuous investment in the second half and selected the new ETF investment keyword Rally. Although various macro uncertainties still exist in the second half, we hope the rally will continue as it did in the first half, and we have selected ETFs suitable for long-term diversified investment, so we ask for your great interest.”

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