In Korea's exchange-traded fund (ETF) market this year, construction-related products posted gains of more than 100%, outperforming semiconductors.
According to Koscom ETF Check on the 19th, as of the 17th, the two construction ETFs listed on the domestic stock market recorded an average gain of 115.96% this year. In about 100 days, the investment more than doubled.
This far exceeds not only oil ETFs, which rose on the back of the Middle East war fallout (average 75.43%), but also the average gain of 29 semiconductor ETFs (73.89%).
By individual product, Samsung Asset Management's "KODEX Construction" ETF jumped 119.8%, rising from 4,115 won at the end of last year to 9,045 won, and Mirae Asset Global Investments' "TIGER 200 Construction" ETF also climbed 112.1%, from 4,625 won to 9,810 won.
The two ETFs stayed in the 3,000-won range until last year and failed to draw market attention, but sentiment shifted sharply this year. After large construction companies emerged as nuclear power plant theme stocks, they surged further as expectations for Middle East reconstruction benefits grew following the war in Iran in March.
Looking at the components, the KODEX Construction ETF has the highest weight in Hyundai Engineering & Construction at 23.09%, followed by Samsung E&A (18.02%) and Daewoo Engineering & Construction (15.14%). KEPCO E&C, DL E&C, and GS Engineering & Construction are also key holdings.
The TIGER 200 Construction ETF shows a similar makeup, with heavy weights in Hyundai Engineering & Construction (26.26%), Samsung E&A (16.50%), and Daewoo Engineering & Construction (13.62%). It also includes Samsung C&T, as well as KEPCO E&C, DL E&C, GS Engineering & Construction, and KCC among its major names.
Individual stock gains are even steeper. So far this year, Daewoo Engineering & Construction has soared 651%, and Hyundai Engineering & Construction is up 154%. DL E&C and Samsung E&A also rose 137% and 109%, respectively, showing strength.
Money inflows are continuing. The KODEX Construction ETF has drawn 130.6 billion won this year, of which 61.4 billion won flowed in over the past week. The TIGER 200 Construction ETF has taken in 94.8 billion won this year, with 43.1 billion won pouring in over the past week.
The market sees ample room for further gains in construction ETFs. Kim Seung-jun, an analyst at Hana Securities, said, "Given the shared view that the impact of a Hormuz Strait closure is not yet significant, first-quarter results for large-cap construction firms are unlikely to show major anomalies."
However, the possibility of a prolonged war is cited as a variable. Kim said, "If a Hormuz closure is prolonged, schedule delays due to supply-demand issues and rising materials and supplies prices could expand the expense burden," adding, "This could affect not only construction companies' costs but also the profitability of real estate development, delaying the timing of a recovery in construction conditions."