Shinhan Asset Management's 'SOL Cosmetics TOP3 Plus' Posts 47.3% Monthly Return

Backed by the global diversification of K-beauty industry exports and robust business performance, an exchange-traded fund (ETF) that focuses on Korea's leading cosmetics value chain has recorded the highest monthly return among all domestic ETFs.

On September 2, Shinhan Asset Management announced that its 'SOL Cosmetics TOP3 Plus' ETF, which invests in major companies within Korea's cosmetics value chain, delivered a monthly return of 47.3% (as of August 31), ranking first out of 1,152 domestic ETFs. Year-to-date, its return has reached 69.94%.

Recently, as investor concentration in the domestic stock market’s semiconductor sector has eased and both index volatility and sector rotations have become more frequent, the cosmetics sector has stood out thanks to clear drivers of business performance and export momentum.

The strength of the cosmetics sector is noteworthy, as it signals structural change confirmed through actual performance, beyond just expectations for consumption recovery. Exports, which previously focused on China and duty-free channels, have recently diversified into the United States, Europe, and Japan, while sales channels have also expanded from online platforms to global offline specialty retailers. Reduced dependence on specific countries or channels has contributed to greater earnings stability and the potential for sustained growth.

This trend is further supported by the strong performance of major companies. COSMAX surpassed KRW 500 billion in quarterly sales for the first time ever, while Kolmar Korea became the first domestic original development manufacturer (ODM) to exceed KRW 100 billion in quarterly operating profit. Cosmecca Korea also exceeded KRW 200 billion in quarterly sales, significantly raising its annual earnings outlook. In the distribution sector, Silicontwo surpassed KRW 400 billion in quarterly sales for the first time, indicating that earnings power is strengthening across the K-beauty value chain, spanning manufacturing, distribution, and brands.

Thanks to these outstanding results, capital is flowing rapidly into SOL Cosmetics TOP3 Plus. Individual investors made net purchases of KRW 16.8 billion over the past month, bringing the total net purchases since listing to KRW 46.5 billion. As of August 31, net assets stood at KRW 123.1 billion, marking an increase of KRW 58.5 billion over the past month.

The 'SOL Cosmetics TOP3 Plus ETF' selects Silicontwo, Kolmar Korea, and APR as the top three companies representing distribution, ODM, and brands, respectively, and allocates roughly 60% of assets to these companies. In addition, it maintains a balanced portfolio by including other globally expanding leaders such as COSMAX, Cosmecca Korea, Amorepacific, and Dalba Global.

Kim Junghyun, Head of the ETF Business Group at Shinhan Asset Management, stated, "K-beauty has entered a qualitatively different growth phase, driven by the diversification of global hit products from individual brands and the concurrent growth of ODM and distribution companies supporting them. In a market environment with increased volatility, it is important to selectively invest in sectors that demonstrate growth potential through actual profit improvement." He added, "The SOL Cosmetics TOP3 Plus ETF is a product that enables efficient participation in the new growth cycle of K-beauty by offering diversified exposure to brands, ODMs, and distribution companies across the industry."

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