Kosdaq Active ETFs Soar as Much as 31.91% in Three Days After Sinking Into Losses

Kosdaq active ETFs beat their benchmarks over the past three trading days

A sharp rebound in the Kosdaq has lifted active exchange-traded funds launched this year that track South Korea’s junior bourse. The funds had posted weak returns during the Kosdaq’s slump, but all of them outperformed their benchmarks during the latest three-day rally. Active ETFs aim to generate excess returns over a benchmark by allowing fund managers to adjust holdings and portfolio weights.

According to the Korea Exchange on Aug. 5, all six Kosdaq active ETFs listed this year beat their benchmark indexes in the three trading days through Aug. 4, when the Kosdaq rose 21.08%.

Midas Asset Management’s MIDAS Kosdaq Active surged 31.91% over the three-day period, outperforming the Kosdaq by 10.83 percentage points. During the same span, Timefolio Asset Management’s TIME Kosdaq Active climbed 29.61%, while DS Asset Management’s DS Kosdaq Active gained 29.21%.

Samsung Active Asset Management’s KoAct Kosdaq Active and Mirae Asset Global Investments’ TIGER Kosdaq Active rose 26.98% and 25.57%, respectively, both ahead of the Kosdaq’s return. Hanwha Asset Management’s PLUS Kosdaq150 Active advanced 26.43%, beating the Kosdaq 150 index’s 24.85% gain.

One asset-management industry official said Kosdaq active ETFs generally have relatively high weightings in semiconductor materials, parts and equipment companies. Strength in those stocks during the recent rebound helped the funds outperform their benchmarks.

Even so, all six ETFs remain in negative territory since listing because of the Kosdaq’s weakness this year. Five of the six have underperformed their benchmarks over that period.

The most recently launched DS Kosdaq Active has fallen 21.08% since listing on July 14, underperforming the Kosdaq’s 0.42% decline by 20.66 percentage points. TIGER Kosdaq Active, which listed on June 2, has dropped 29.22%, lagging the Kosdaq’s 23.91% loss by 5.31 percentage points.

MIDAS Kosdaq Active, which debuted on May 19, has fallen 24.77%, faring better than the Kosdaq’s 28.0% decline. KoAct Kosdaq Active and TIME Kosdaq Active, both listed on March 10, have dropped 38.61% and 43.67%, respectively, compared with the Kosdaq’s 31.38% loss over the same period. PLUS Kosdaq150 Active, which listed on March 17, has fallen 32.45%, compared with a 32.19% decline in the Kosdaq 150 index.

Another asset-management industry official said the recent rebound does not appear to be temporary, citing solid earnings at a number of Kosdaq-listed companies. The official added that if the market’s concentration in Kospi stocks eases, sentiment should improve across the broader Kosdaq market.

Lee Su, Hankyung.com reporter, 2su@hankyung.com