Two New ACE Active ETFs for US Investment to Be Listed

Korea Investment Management announced on November 10 that it will list two new active exchange-traded funds (ETFs) on November 11. The two products are the ACE US Large Cap Growth Active ETF and the ACE US Large Cap Value Active ETF.

The ACE US Large Cap Growth Active ETF is referred to as the "Korean version of VUG (Vanguard Growth Index Fund)" and uses the same benchmark index as VUG, the CRSP US Large Cap Growth Price Return Index. As of the end of October, VUG is a fund with assets of approximately 293 trillion won, investing in major US large-cap stocks with high growth potential such as Nvidia, Microsoft, Apple, Amazon.com, and Broadcom.

The ACE US Large Cap Value Active ETF is known as the "Korean version of VTV (Vanguard Value Index Fund)" and utilizes the same benchmark index as VTV, the CRSP US Large Cap Value Price Return Index. VTV is a product with assets of about 212 trillion won, investing in relatively undervalued US large-cap stocks such as JPMorgan Chase, Berkshire Hathaway Class B, Exxon Mobil, and Walmart.

Both products share the characteristic of being style investment products. Style investing refers to an approach that groups stocks with specific characteristics and invests in them. The most common methods are growth investing and value investing. By consistently maintaining the characteristics of the portfolio, long-term returns are enhanced. Through these two ETFs, Korea Investment Management provides style investment tools for the US stock market.

Both ETFs are launched as active funds to implement a strategy that adjusts sensitivity to economic cycles (beta) while pursuing style investing. In periods of economic recovery and expansion, the funds increase the proportion of high-beta stocks, while in periods of economic slowdown and recession, they include more low-beta stocks.

Kang Seongsu, Executive Director in charge of solutions at Korea Investment Management, stated, "Large-cap growth and large-cap value stocks occupy a central position in institutional investors' asset allocation," adding, "By applying global investment trends domestically, we are introducing new ACE ETFs."

He continued, "The periods when value and growth stocks outperform the market index differ. By utilizing both ETFs, not only institutions but also individual investors can implement style rotation strategies-changing investment styles in response to economic conditions to pursue excess returns-and build efficient asset allocation portfolios."

Both ACE ETFs are performance-based dividend products, and principal loss may occur depending on investment results.

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