Samsung Active Lists 'KoAct Korea TOP5 Plus Bond Balanced 50 Active' ETF

Top Market-Cap Stocks Combined with Domestic Short-Term Bonds
Classified as a Safe Asset for Retirement Pension (DC/IRP)

Samsung Active Asset Management said on Oct. 27 that it had newly listed the KoAct Korea TOP5 Plus Bond Balanced 50 Active exchange-traded fund (ETF).

The ETF was designed for a market environment in which investment is becoming increasingly concentrated in a small number of large-cap stocks and return gaps between stocks are widening. It seeks excess returns by selectively focusing on stocks with high market capitalizations, while combining them with domestic short-term bonds to generate steady income.

Concentration in the largest stocks on the Korean stock market has increased. According to FnGuide, as of the end of September, the top five stocks by market capitalization accounted for 58.9% of the KOSPI, while the top 10 accounted for 64.5%. Samsung Electronics and SK hynix held on to first and second place, respectively, while SK Square (third), Samsung Electro-Mechanics (fourth), Samsung Life Insurance (ninth) and Samsung C&T (10th) made significant gains in the third quarter of this year. Rankings among the top stocks are also being reshuffled rapidly as the industrial paradigm shifts.

In particular, return gaps are widening even among the largest stocks by market capitalization, making active strategies that distinguish winners from losers a key factor in determining success. The return gap between the top 20% and bottom 20% of the 100 largest stocks by market capitalization was 158.7 percentage points in 2024 and 231.7 percentage points in 2025, and reached 199.2 percentage points in the third quarter of this year. Among the top 10 stocks by market capitalization, as of the end of the third quarter this year, Samsung Electro-Mechanics (493.3%), SK Square (209.5%), SK hynix (172.8%) and Samsung Electronics (123.9%) surged, while some other top-ranked stocks posted negative returns. The KOSPI returned 62.3% over the same period.

The KoAct Korea TOP5 Plus Bond Balanced 50 Active builds its core around the top five stocks by market capitalization and makes concentrated investments in up to 10 stocks, including potential candidates that could rise into the top ranks. Rather than focusing on short-term market fluctuations, it prioritizes identifying stocks expected to improve their earnings after passing an earnings trough, amid structural industrial changes. Reflecting shifts in market leadership since 1990—from IT and blue chips to China plays, semiconductors, and contactless businesses and the Green New Deal—the fund plans to proactively include companies benefiting from the forces currently driving the market, namely the AI revolution, energy security and geopolitical realignment, as well as companies whose market-cap rankings are on a sustained upward trend.

For the bond portion, the fund uses products that invest in high-quality domestic short-term bonds. It keeps the average duration, which measures the sensitivity of bond prices to interest rate changes, short at around one year, reducing the price risk from interest rate fluctuations compared with long-term bonds.

The ETF is also classified as a safe asset for defined contribution (DC) and individual retirement pension (IRP) accounts, and can be held at a 100% allocation in retirement pension, personal pension and individual savings account (ISA) accounts. When used in a pension account, it offers tax benefits, including a lower tax rate of 3.3% to 5.5% and an annual tax credit limit of 9 million won. Investors can also use the fund to meet the mandatory 30% safe-asset allocation, thereby increasing their effective equity exposure within their portfolios.

Kang Donguk, a manager in the Management Division 1 at Samsung Active Asset Management, said, "In the Korean stock market, where 20% of the stocks invested in determine 80% of overall performance, the key to success is ultimately the ability to select stocks by proactively identifying structurally growing industries and companies undergoing an earnings turnaround." He added, "We will do our utmost to provide individual and pension investors with steady excess returns by making concentrated investments in the large-cap stocks driving the Korean market and combining them with stable domestic short-term bonds."

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