"I Should Have Followed My Friend"?My Return Is 60%, My Friend's Is 141%... Why Such a Gap in the Same Nuclear Power ETF? [Weekend Money]

This year, the returns of "K-Nuclear" themed exchange-traded funds (ETFs) have diverged depending on whether or not KOSDAQ-listed companies were included in their portfolios.

원본보기 아이콘

According to ETF Check, as of April 16, the year-to-date returns of domestic nuclear power ETFs ranged from a minimum of 60% to a maximum of 141%. The ETF with the highest return was "TIGER Korea Nuclear Power" by Mirae Asset Global Investments, which posted a return of 141.75%.

Regarding the background behind this overwhelming performance, Park Wooyeol, a researcher at Shinhan Investment Corp., explained, "TIGER Korea Nuclear Power was the only ETF to remove Korea Electric Power Corporation, whose performance has been volatile, from its portfolio and allocated the highest weights to Daewoo Engineering & Construction and Hyundai Engineering & Construction, both of which saw sharp increases in performance." He added, "Among small- and mid-cap stocks, the ETF also included the largest allocations to Woori Technology, DL E&C, and Orbitech, all of which surged, and incorporated the highest number of KOSDAQ-listed companies."

원본보기 아이콘

He emphasized that the inclusion of nine KOSDAQ-listed companies in nuclear power ETFs was a key factor driving performance differentiation. These were companies outside the KOSDAQ 150 that had previously attracted little attention from the securities industry, but turned out to be alpha contributors to returns. Of the nine KOSDAQ-listed stocks included in K-Nuclear ETFs, only three-BHI, SungKwang Bend, and Woori Technology-were part of the KOSDAQ 150. Among them, Woori Technology, which delivered the best performance, was only covered by reports without target prices, while BHI and SungKwang Bend had investment opinions from only two and one securities firms, respectively. The other six companies were all outside the KOSDAQ 150 and mostly lacked any analyst coverage. The average return of these nine companies surpassed the KOSDAQ index during the same period.

TIGER Korea Nuclear Power’s portfolio includes Woori Technology at 9.9%, DL E&C at 8.2%, and Orbitech at 0.8%. BHI was most heavily weighted in KODEX Nuclear Power SMR at 16.7%, while SungKwang Bend had the highest allocation in SOL Korea Nuclear Power SMR at 2.5%.

The growth momentum of domestic nuclear power companies is expected to continue. The total net assets of the five K-Nuclear ETFs have increased from around KRW 1.1 trillion at the beginning of the year to KRW 2.4 trillion as of this month. Researcher Park saw the ongoing global conflicts and the resulting geopolitical blocs as upward drivers for the K-Nuclear industry. He stated, "Given that uranium is a key mineral, nuclear power is a strategic industry where, even if China or Russia can supply it at lower costs, outsourcing is only entrusted to allied nations." He further explained, "With the closure of the Strait of Hormuz increasing oil price volatility, nuclear power provides a realistic alternative to reliably meet electricity demand."

© The Asia Business Daily(www.asiae.co.kr). All rights reserved.