"We can't know yet whether artificial intelligence (AI) is a bubble, and whether it is a bubble isn't what matters. We need to invest long term in tech stocks that will drive future growth."
Bae Jae-gyu, chief executive of Korea Investment Management, said this at the "ACE ETF rebranding 3rd anniversary investment seminar" held on the 24th at the Conrad Hotel in Yeouido, Seoul, stating accordingly that "future growth lies not in manufacturing but in tech corporations."
Bae said, "All a tech corporation needs are three things: an idea, a computer, and the electricity to run it," adding, "Unlike manufacturing, which requires capital expenditures and product production, tech corporations have far superior added value."
He also noted, "To reduce swings in investor sentiment, you should invest in exchange-traded funds (ETFs) rather than individual stocks," and suggested, "When investing in U.S. equities, you should focus on the tech-heavy Nasdaq index rather than the manufacturing-oriented Standard & Poor's (S&P) index."
Regarding the recent debate over an AI bubble, Bae emphasized that "investing in tech stocks is the trend of the times." He said, "Value investing worked in the manufacturing era, but now the world is led by technology," adding, "When a new technology emerges, there are corporations around it that 'sell picks and shovels,' and you have to look at both sides together."
Bae explained this with past examples. If the corporations that sold shovels during the Gold Rush "sold picks and shovels," then during the railroad and internet booms, corporations supplying steel or semiconductors posted big revenue. The explanation is that in the AI era, attention should also be paid to big tech and semiconductor corporations.
Meanwhile, the seminar was organized to mark the 3rd anniversary of the ACE ETF rebranding. ACE ETF's net worth rose more than sevenfold from 3 trillion won at the time of rebranding to about 23.3 trillion won as of the 21st. During this period, market share doubled from 3.99% to 8.30%, solidifying its position as No. 3 in the industry.
Nam Yong-su, head of ETF management at Korea Investment Management, said, "While the ETF market grew 3.7 times, ACE ETF grew by nearly eight times," adding, "We injected new vitality into a market where the top two seemed unshakeable and offered investors a wider set of choices."