Timefolio Asset Management said on the 10th that it will list the "TIME KOSDAQ Active ETF" on the Korea Exchange's main board.
TIME KOSDAQ Active is an active exchange-traded fund (ETF) that selects and invests in core growth stocks on KOSDAQ. This is the first time an active ETF using KOSDAQ as its benchmark index has been launched.
Timefolio Asset Management assessed that expectations for resolving the Korea discount (the undervaluation of the Korean stock market) have been rising recently in Korea's stock market, improving overall market valuation (corporate value).
The company determined that, in this environment, a strategy of weeding out distressed corporations through an active ETF and focusing on growth stocks is effective.
TIME KOSDAQ Active has as its core strategy flexible active management that captures KOSDAQ's characteristically rapid theme rotation and opportunities to discover growth corporations.
Specifically, it cited a "Core&Satellite (core&satellite)" strategy. The core portfolio places blue-chip large-cap stocks such as secondary batteries and biotech at the core to form the fund's backbone, while the satellite portfolio actively leverages KOSDAQ's uniquely rapid shifts in supply-demand and theme rotations.
Lee Jeong-uk, Director General of the ETF Management Division at Timefolio Asset Management, said, "An active strategy that reads shifts in industrial paradigms through thorough research and adjusts, in real time, names whose earnings growth is backed up is the key to improving win rates in KOSDAQ investing."
It explained that the initial portfolio was built around large-cap sectors representative of KOSDAQ, such as secondary batteries and biotech, taking into account demand from institutions such as pension funds.
Major holdings include EcoPro and EcoPro BM, which rank high by market capitalization on KOSDAQ, with heavy weights. In addition, it allocates biotech sector names such as Sam Chun Dang Pharm, ABL Bio and Alteogen, and semiconductor and advanced technology stocks such as Rainbow Robotics, FADU and LEENO Industrial, pursuing stability and profitability at the same time.
It said that afterward it will swiftly shift weights to stocks with high growth potential in line with market conditions to generate excess revenue.
A Timefolio Asset Management official said, "The listing of the 'TIME KOSDAQ Active ETF' is expected to lower the barrier to KOSDAQ investing for individual investors, and provide institutions and pension funds with an efficient tool to pursue alpha revenue in the KOSDAQ market."