 |
Photo= Korea Exchange |
[Alpha Biz= Kim Sangjin] The popularity of Exchange-Traded Funds (ETFs) investing in major South Korean conglomerates, such as Samsung and SK, has declined due to a sluggish domestic stock market.
Experts predict that a short-term rebound is unlikely due to factors like the potential imposition of tariffs following the January inauguration of Trump's second term and domestic political uncertainties.
According to the Korea Exchange, as of the 26th, the total net asset value (NAV) of 10 domestic conglomerate group ETFs (excluding the recently listed Hanwha Group ETF) stood at 12.155 trillion KRW, down more than 4 trillion KRW from 16.514 trillion KRW at the end of last year. Considering that the total NAV of all ETFs has grown by more than 50 trillion KRW this year, this performance is relatively weak.
This year, most conglomerates have experienced sluggish performance, except for key industries like semiconductors and automobiles. Many top companies by market capitalization have struggled with prolonged domestic sluggishness and competition with Chinese companies, leading to a downturn. According to financial information provider FnGuide, while mid-cap stocks have risen by 6.40% this year, large-cap stocks have fallen by 12.19%. FnGuide classifies stocks into large-caps (top 1-100 by market cap) and mid-caps (101-300).
For Samsung Group, excluding the bio and financial sectors, the stock prices of 12 out of its 17 affiliates have declined compared to the end of last year. Samsung Electronics, in particular, has seen weaker-than-expected growth this year, partly due to delays in delivering high-bandwidth memory (HBM) to NVIDIA. Recently, domestic securities firms have lowered their 2024 operating profit forecasts for Samsung Electronics. The total NAV of five Samsung Group ETFs has decreased by 27.47% compared to the end of last year, marking the largest drop among domestic group stock ETFs.
POSCO and LG Group are also facing challenges, with the prices of their core industries like secondary batteries, steel, and chemicals struggling due to low-cost competition from Chinese companies. According to the Korea Exchange, the 'ACE POSCO Group Focus' ETF has posted a -56.05% return this year, while the 'TIGER LG Group+Fundamentals' ETF has posted a -17.53% return, underperforming the KOSPI index, which has fallen by 9.43% during the same period.
Alphabiz Reporter Kim SangJin(letyou@alphabiz.co.kr)
