DS Asset Management announced at a press conference on the Korea Exchange (KRX) on July 10 that its first ETF, the "DS KOSDAQ Active ETF," will be officially launched on July 14. This is an actively managed ETF focusing on leading companies within the structural growth industries of the KOSDAQ market; the management fee is set at 1.00% annually.
Core Differentiation in Stock Selection for DS KOSDAQ Active ETF: 60% Index Coverage
According to Jeong Sung-in, Director of the ETF team at DS Asset Management, approximately 86% of the market capitalization of companies in the KOSDAQ 150 index are at least 1 trillion KRW; the strategy of DS KOSDAQ Active ETF is to actively target the remaining 40% of the market not covered by the KOSDAQ 150, with companies below 1 trillion KRW expected to make up over 60% of the portfolio.
Jeong stated, "The KOSDAQ 150 index only covers about 60% of the total market capitalization of the KOSDAQ market. Our strategy is to seek excess returns in the remaining 40% of the market that the main index does not cover." CEO Kim Sung-hoon announced that the company will leverage internal capabilities such as research strength and leading stock performance as core competitive advantages for the ETF.
Current KOSDAQ Market Conditions and DS Asset Management’s Research Advantages
According to DS Asset Management, the selection criteria for the KOSDAQ market are as follows: among over 1,800 listed companies on KOSDAQ, insufficient institutional research investment leads to severe information asymmetry; deep analysis capabilities of individual stocks can directly translate into performance differences. Since its establishment in 2008, DS Asset Management has used a database that tracks companies from their unlisted stage to select high-growth potential enterprises within KOSDAQ.
Chief Investment Officer Hyeon Sang-gyun stated, "Allocating assets based on market value weighting prevents the fund from fully reflecting company valuations; DS Asset Management can identify company value and keenly reflect changes in fundamentals over time."
Jeong also pointed out that profit growth in semiconductor components and materials companies is beginning to appear in the KOSDAQ market, coupled with government policies such as eliminating bankrupt companies and upgrading/downgrading systems, as well as expected institutional fund inflows following changes in the benchmark index; these are Jeong’s personal views.
Frequently Asked Questions
Why is the management fee for the DS KOSDAQ Active ETF set at 1%?
According to DS Asset Management, the 1.00% annual management fee is currently the highest in the industry; the company states it aims to offset this fee through performance, emphasizing that its research-driven active stock selection is the core reason for the high fee. The actual post-fee performance of the ETF will be based on official fund data.
What is the difference between the DS KOSDAQ Active ETF and ETFs tracking the KOSDAQ 150 index?
According to DS Asset Management, the KOSDAQ 150 index only covers about 60% of the total market capitalization of the KOSDAQ market, with approximately 86% of its constituent companies valued at over 1 trillion KRW. The DS Active ETF plans to actively target the remaining 40% of the market, with companies below 1 trillion KRW expected to constitute over 60% of the portfolio. The specific holdings are subject to the official fund prospectus.
How does DS Asset Management utilize AI to assist in managing this ETF?
Reports indicate that DS Asset Management plans to implement AI-based management and analysis systems, daily AI management reports, and rebalancing reviews as part of its scientific management and investor communication strategy; specific AI system specifications and operations are subject to official announcements from DS Asset Management.
