KIWOOM to List "Samsung SK Group TOP4+ ETF" on September 1

Including Samsung Life Insurance, Samsung C&T, SK Square, and SK Inc.

Targeting the revaluation trend of equity-holding affiliates

KIWOOM Asset Management announced on August 31 that it will newly list the "KIWOOM Samsung SK Group TOP4+ ETF" on the Korea Exchange on September 1. This ETF will invest primarily in Samsung Electronics, SK hynix, and key affiliates of the Samsung and SK Groups.

This product invests in 10 stocks among the affiliates of Samsung and SK corporate groups that have the highest relevance to each group’s core businesses. At the end of June each year, the ETF selects the core business sectors for each group and analyzes segment revenues by affiliate to determine the constituents to include. For the top two stocks per group, weights of 25% and 15% are allocated, respectively, while the remaining six stocks are included using a free-float market capitalization weighting method, with a maximum of up to 10% per stock.

The portfolio is composed of three major pillars: core semiconductor players Samsung Electronics and SK hynix; holding and operating affiliates with stakes in these companies—Samsung C&T, Samsung Life Insurance, SK Inc., and SK Square; and key companies in the AI semiconductor value chain—Samsung Electro-Mechanics, SAMSUNG E&A, SKC, and ISC.

Recently, both Samsung Electronics and SK hynix have announced unprecedented shareholder return policies, and as a result, affiliates holding their shares have been drawing increased market attention. Analysts note that Samsung Life Insurance and Samsung C&T, which hold shares in Samsung Electronics, can expect increased cash inflows from bigger dividends, while SK Square and its parent company SK Inc., which hold shares in SK hynix, may benefit from revaluations in their holdings due to share buybacks and retirements.

Additionally, the ETF will include affiliates expected to benefit from the increasing demand for AI server components. This includes Samsung Electro-Mechanics, a major global player in the MLCC (Multilayer Ceramic Capacitor) market and high-value FC-BGA substrates for AI servers; SKC, which is pushing into the semiconductor glass substrate business; and ISC, a specialized provider of semiconductor test sockets.

Kyungjoon Lee, Head of ETF Management at KIWOOM Asset Management, stated, "Whereas previous semiconductor ETFs focused mainly on Samsung Electronics, SK hynix, and materials, parts, and equipment companies, this product also incorporates equity-holding affiliates to capture how the fruits of semiconductor growth are spreading to group affiliates via their shareholdings. As both Samsung Electronics and SK hynix are embarking on major shareholder return policies, this ETF could provide a new option for investors seeking exposure to both flagship semiconductor companies and their equity-holding affiliates reaping the benefits from these trends."

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