Samsung Asset Management Launches "Samsung Automatic Investment Semiconductor Target Return Fund No.1"

Focused Investment in Semiconductors
Portfolio Composed of Over 50% Bonds, Less Than 50% Equities

Samsung Asset Management announced on the 21st that it will launch the “Samsung Automatic Investment Semiconductor Target Return Fund No.1,” which focuses on investments in the domestic semiconductor sector.

According to Samsung Asset Management, this fund is a target return fund that invests in both domestic semiconductor ETFs and individual semiconductor stocks. When the target return of 7% is achieved, the investment is automatically converted to safer assets such as bonds.

The fund will be established on the 29th, and investors can subscribe through major distributors such as Hana Bank, KakaoBank, Shinhan Investment Corp., and Daishin Securities.

Starting with the launch of “Samsung Automatic Investment EMP Target Return Fund No.1” in June 2024, Samsung Asset Management has introduced a total of 11 diverse target return funds, including Global Theme EMP and Core AI. In particular, Fund No.5, which was established in October last year, raised 515.5 billion won, ranking first in fundraising size among all target return funds launched that year. All target return funds launched by Samsung Asset Management to date have achieved their target returns.

The newly launched “Samsung Automatic Investment Semiconductor Target Return Fund No.1” differentiates itself in terms of management strategy compared to previous funds. While previous series of target return funds used an EMP strategy investing only in ETFs, this new fund seeks excess returns by investing in both ETFs and individual stocks. The portfolio consists of more than 50% bonds and less than 50% equities. Upon reaching the 7% target return, assets are shifted to short-term bonds and liquid assets to preserve gains.

The equity portion is operated using a “core-satellite strategy.” The core strategy accounts for about 80%, while the satellite strategy accounts for about 20%. For the core strategy, the fund selects high-liquidity, high-quality domestic semiconductor ETFs and categorizes them into market investment, concentrated investment, and thematic types, then selects ETFs for each category as part of the EMP strategy. The satellite strategy includes key stocks in the domestic semiconductor value chain, such as Samsung Electronics and SK hynix, and selects up to 10 stocks based on their relative momentum and change rate compared to the market index using a quantitative approach. The focus is on investing in leading stocks that drive trends within the semiconductor industry.

The bond portion is managed mainly through short-term ETFs, maintaining an average duration of around two years to mitigate interest rate risk and complement the volatility of equity investments.

Minwoong Seo, manager at Samsung Asset Management, stated, “The semiconductor industry is the biggest beneficiary of the AI rally sparked by ChatGPT, and expectations for structural growth in semiconductors remain strong due to the aggressive CAPEX (capital expenditure) expansion cycle of big tech and the advancement of AI models. We will do our best to achieve the target return quickly by leveraging our experience in managing both domestic equities and global semiconductor funds.”

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