Korean ETFs Focused on Securities and Shipbuilding Surge Amid Optimism
Last week (19th to 20th), exchange-traded funds (ETFs) focused on securities stocks dominated the top performance rankings. This surge in performance is attributed to heightened expectations of strong earnings and projections of increased shareholder returns. ETFs related to the shipbuilding industry, anticipated to benefit from strengthened cooperation with the United States, also made it into the top rankings.
According to the Korea Exchange on the 22nd, the top three ETFs in terms of performance last week were all securities-focused. The highest-performing ETF, HANARO High Dividend TOP3 Plus, recorded a return of 14.71%. This ETF primarily invests in major securities firms such as Mirae Asset Securities, NH Investment & Securities, and Korea Financial Group (the parent company of Korea Investment & Securities). Following closely, KODEX Securities increased by 14.62%, and TIGER Securities rose by 14.27%.
The simultaneous rise of securities stocks is driven by expectations of significant growth in earnings. As the stock market booms, the volume of stock trading has increased, leading to a surge in fees earned by securities firms. The third amendment to the Commercial Act, which mandates the buyback of shares, has also contributed positively, as securities stocks typically have a high proportion of treasury shares.
Some analysts believe that securities firms, facing less investment pressure such as expansion of production facilities, will actively pursue shareholder returns in response to government policies. Additionally, KODEX Insurance, which has a significant allocation in insurance stocks, ranked fifth with an 11.16% return last week.
Shipbuilding ETFs also demonstrated strong performance. ETFs like TIGER Shipbuilding TOP10, KODEX K Shipbuilding TOP10, and SOL Shipbuilding TOP3 Plus all achieved double-digit returns. Analysts attribute this positive trend to the Biden administrations new Maritime Action Plan (MAP), aimed at revitalizing the domestic shipbuilding industry. ETFs that contain a large number of Hanwha Group affiliates showed particularly strong results.
According to the Korea Exchange on the 22nd, the top three ETFs in terms of performance last week were all securities-focused. The highest-performing ETF, HANARO High Dividend TOP3 Plus, recorded a return of 14.71%. This ETF primarily invests in major securities firms such as Mirae Asset Securities, NH Investment & Securities, and Korea Financial Group (the parent company of Korea Investment & Securities). Following closely, KODEX Securities increased by 14.62%, and TIGER Securities rose by 14.27%.
The simultaneous rise of securities stocks is driven by expectations of significant growth in earnings. As the stock market booms, the volume of stock trading has increased, leading to a surge in fees earned by securities firms. The third amendment to the Commercial Act, which mandates the buyback of shares, has also contributed positively, as securities stocks typically have a high proportion of treasury shares.
Some analysts believe that securities firms, facing less investment pressure such as expansion of production facilities, will actively pursue shareholder returns in response to government policies. Additionally, KODEX Insurance, which has a significant allocation in insurance stocks, ranked fifth with an 11.16% return last week.
Shipbuilding ETFs also demonstrated strong performance. ETFs like TIGER Shipbuilding TOP10, KODEX K Shipbuilding TOP10, and SOL Shipbuilding TOP3 Plus all achieved double-digit returns. Analysts attribute this positive trend to the Biden administrations new Maritime Action Plan (MAP), aimed at revitalizing the domestic shipbuilding industry. ETFs that contain a large number of Hanwha Group affiliates showed particularly strong results.
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