Korea Investment Management to List ACE Samsung Electronics & SK hynix Plus Bond Mix 50 ETF

A newly listed mixed-type ETF will offer investors strong growth potential by investing in leading artificial intelligence (AI) semiconductor stocks, while allocating half of its portfolio to bonds to absorb the risk of stock price volatility.

On August 24, Korea Investment Management announced that it would be listing the ACE Samsung Electronics & SK hynix Plus Bond Mix 50 ETF, an exchange-traded fund that invests in domestic stocks and bonds at a 50:50 allocation, on August 25.

This product maintains a 50% bond allocation, which allows it to be held up to 100% in defined contribution (DC) pension plans and individual retirement pension (IRP) accounts. It operates based on the 'KAP Samsung Electronics & SK hynix Plus Bond Mix 50 Index' as its underlying index, and consists of a concentrated portfolio of three core stocks: Samsung Electronics (20%), SK hynix (20%), and Samsung Electro-Mechanics (10%), a leading company related to AI semiconductors.

For domestic bonds, the primary assets included are government bonds with maturities of more than one month and less than or equal to two years, as well as monetary stabilization bonds with maturities exceeding one year and up to two years. The portfolio's individual components will be determined based on the duration and yield to maturity (YTM) of the underlying index, and to maintain operational efficiency, the ETF may not fully replicate all constituents of the underlying index.

The ETF adopts a monthly distribution structure, providing a payout at the beginning of each month based on dividends from constituent stocks and interest income from bonds.

Nam Yongsoo, Head of the ETF Division at Korea Investment Management, stated, "A favorable investment environment for Korea's leading semiconductor stocks has emerged, driven by expanded AI investment, improving memory industry conditions, and heightened expectations for increased shareholder returns from Samsung Electronics and SK hynix. This has enhanced the investment appeal of products that invest in related companies." He continued, "Reflecting these market conditions, the ACE Samsung Electronics & SK hynix Plus Bond Mix 50 ETF, which will be listed with Samsung Electro-Mechanics added as a constituent, is characterized by addressing demand for both memory semiconductors and power components." He further explained, "For investors who want to invest in the long-term growth potential of Korea's AI semiconductors but are concerned about high volatility, the ACE Samsung Electronics & SK hynix Plus Bond Mix 50 ETF, with 50% allocated to bonds to reduce volatility, can be a good alternative."

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