Samsung Active Asset, KoAct Dividend Growth Active ETF Listed

A new 'corporate value-up' ETF has been launched that invests not simply based on low price-to-book ratio (PBR), but in companies that improve cash-generating ability through growth in return on equity (ROE) and have the willingness to increase shareholder return rates.

Samsung Active Asset Management announced on the 27th that it will list the fourth KoAct ETF, the 'KoAct Dividend Growth Active ETF.'

The KoAct Dividend Growth Active ETF moves beyond simply low PBR and invests in companies whose ROE grows based on the willingness and capability to improve shareholder return rates through better cash flow. The shareholder return rate refers to the combined ratio of dividend payout and share repurchase tendencies, directly sharing profits between shareholders and companies.

The first strategy of the KoAct Dividend Growth Active ETF is to select companies with improving cash flow. This is to check whether future profits increase and shareholder returns grow, confirming not only dividends but also the capacity for share repurchases. The second is to find companies with the capability to efficiently invest equity capital and generate profits, i.e., companies with increasing ROE. Lastly, companies that show willingness to improve shareholder returns by increasing dividend payment frequency and dividend yield are analyzed and included.

Currently, the expected sector allocation of the KoAct Dividend Growth Active ETF is well diversified with banks and cards at 17%, chemicals and paper at 14%, and automobiles at 13%. Samsung Active Asset Management emphasized that although banks have high dividend yields and cash-generating ability leading to high stock price appreciation, it is important to diversify investments into stocks that can actively improve shareholder returns or cash flow going forward.

In particular, Samsung Active Asset Management stressed that to accurately and continuously select companies suitable for the 'corporate value-up program,' it is necessary to conduct both quantitative work based on key investment indicator figures to screen investment targets and qualitative work to discover companies that will increase shareholder return rates in the future. Therefore, an active management style is more appropriate.

The portfolio of the KoAct Dividend Growth Active ETF will evenly include 45 companies with excellent cash flow and shareholder returns as well as those with improvement prospects, such as Hana Financial Group, Hyundai Motor, K Car, and Meritz Financial Group. The total expense ratio is 0.5% per annum.

Seobeomjin, Head of Strategy Solutions at Samsung Active Asset Management, said, "Recently, the stock market has shown strong interest in low PBR stocks, but besides that, it is necessary to find companies that can increase shareholder return rates through improved cash-generating ability, increased dividends, and share repurchases." He added, "The KoAct Dividend Growth Active ETF will actively manage from a long-term perspective by selecting only companies expected to increase shareholder returns and corporate value through the corporate value-up program."

The KoAct Dividend Growth Active ETF is a quarterly distribution product, distributing within 7 business days based on the last business day of January, April, July, and October.

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