Samsung Active Asset Management's 10th exchange-traded fund (ETF), KoAct U.S. Nasdaq Growth Corporations Active, is weak from its first day of listing. This ETF holds 15% of U.S. data analysis software corporation Palantir and 15% of semiconductor corporation Broadcom, both of which have recently undergone corrections.
KoAct U.S. Nasdaq Growth Corporations Active was trading at 9,460 won on the KOSPI market at 9:34 a.m. on the 25th. It fell by 2.97% (290 won) from its reference price (9,750 won).
Samsung Active Asset Management introduced KoAct U.S. Nasdaq Growth Corporations Active as a product that invests in corporations leading innovative industries based on its expertise in overseas stock research, seeking to achieve excess performance compared to the Nasdaq index. The intention is to differentiate by investing more than the market capitalization weight in the Nasdaq index.
For example, KoAct U.S. Nasdaq Growth Corporations Active allocated 15% to both Palantir and Broadcom. The weights of the two corporations in the Nasdaq index are 0.8% and 3.35%, respectively.
The problem is that the performance of the underlying assets is not good at the time of listing. Palantir's stock price has been plummeting daily. This is due to concerns raised about potential cuts to the U.S. defense budget while Palantir was regarded as a "defense stock" in the artificial intelligence (AI) sector. Palantir's stock price fell by over 10% overnight.
Broadcom also faced setbacks after news that Microsoft (MS) terminated lease agreements for two data centers. Investors who believe that the pace of investment in AI-related areas may slow down sold off semiconductor and energy stocks.
However, KoAct U.S. Nasdaq Growth Corporations Active invests about 15% in Alphabet (Google's parent company) in addition to Palantir and Broadcom. It also includes investments in ▲Natera (a genetic-based cancer diagnostics corporation) ▲Upstart Holdings (an AI-based loan assessment solution) ▲Zillow (an AI-based real estate brokerage platform) ▲Dutch Bros (a coffee brand popular among millennials) ▲Tapestry (a fashion brand popular among millennials). This means that a rebound is possible depending on the performance of other stocks.
Yang Hee-chang, manager of Samsung Active Asset Management, noted, "The goal is to integrate the fast-changing trends of emerging growth industries into the portfolio for investors who feel disappointed with passive investment in Nasdaq index ETFs," adding, "We will utilize Samsung Active Asset Management's solid corporate research and active management expertise to generate excess revenue compared to the Nasdaq index."