Hanwha Asset Management "ARIRANG 200, 25% Return Last Year"

Hanwha Asset Management announced on the 5th that the 'ARIRANG 200' Exchange-Traded Fund (ETF), which tracks the 'KOSPI 200' index, achieved the best performance last year compared to ETFs from other companies tracking the same index.

'ARIRANG 200' rose 25.090% last year based on the adjusted net asset value, recording the highest increase among ETFs tracking the same index from other companies. 'ARIRANG 200' is a product that tracks the 'KOSPI 200,' a representative domestic index composed of 200 stocks selected considering market representativeness, industry representativeness, and liquidity among stocks listed on the Korea Exchange.

The 'adjusted net asset value' used as the basis for calculating returns is a net asset value calculated to reflect the fund's profit and loss status as is. Funds, including ETFs, settle profit and loss and taxes annually, resetting the net asset value to 1000 while adjusting the number of investor units. In this case, comparing returns based solely on the net asset value becomes meaningless. To prevent this phenomenon, the adjusted net asset value is calculated assuming the net asset value was not reset to 1000 after settlement.

The adjusted net asset value makes it easier to compare and evaluate return differences on a consistent basis, considering differences in dividend schedules and amounts among companies. However, the adjusted net asset value may differ from market trading returns and aligns with returns through issuance market creations and redemptions.

Of course, other ETFs tracking the same index (KOSPI 200) also recorded similar performance levels with returns in the 24-25% range. This is because the overall stock market performed well last year, driven by expectations that the U.S. Federal Reserve (Fed) would lower interest rates this year.

However, among the 18 PR (Price Return) and TR (Total Return) products tracking the 'KOSPI 200' index, the gap between the highest return 'ARIRANG 200' and the lowest return product from other companies was 0.384 percentage points. Considering the nature of passive ETFs, which are typically long-term investments, the company explained that this is a difference that cannot be ignored.

In the fiercely competitive ETF market, where companies lower fees even at the cost of losses to secure market share, a 1bp (1bp = 0.01 percentage points) difference is considered significant. Hanwha Asset Management explained that institutional and individual investors sensitive to fees and costs might consider investing in 'ARIRANG 200,' which had the best performance last year.

Kim Eun-chong, manager of the ETF Management Team at Hanwha Asset Management, said, "This result is due to continuous arbitrage and portfolio weight management according to market conditions, aiming to outperform the benchmark (BM) as much as possible." He added, "In particular, we recently attempted arbitrage related to the Celltrion Healthcare merger, which contributed 8.3bp (0.083 percentage points) alpha (excess return), leading to this favorable outcome."

Choi Young-jin, head of the Strategic Business Division at Hanwha Asset Management, advised, “Even if ETFs track the same index, investors need to examine which asset manager consistently and stably manages volatility and returns.” He added, “Just as you cannot judge the taste of a watermelon by its size and appearance alone, investors should not only look at scale and name value but also consider where consistent, stable, and excellent performance originates to take a step closer to successful investing.”

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