With the SpaceX initial public offering (IPO) just over a month away, major asset management firms in South Korea are seeing increased investments in aerospace exchange-traded funds (ETFs). However, most of these funds have recorded negative returns over the past month.
According to the Korea Exchange on May 11, Samsung Asset Management's KODEX U.S. Aerospace ETF has seen a return of -5.64% over the past month, with trading volume reaching 53.7 billion won as of May 8. Hana Asset Management's 1Q U.S. Aerospace Tech ETF recorded a return of -0.19% and a trading volume of 10.7 billion won.
ETFs launched last month have shown similar trends. Mirae Asset Management's TIGER U.S. Space Tech ETF, which was listed on April 14, has a return of -5.64% and a trading volume of 41.2 billion won. The ACE U.S. Space Tech Active ETF from Korea Investment Trust Management, which also launched on the same day, recorded a return of -0.63% and a trading volume of 30.5 billion won. Shinhan Asset Management's SOL U.S. Aerospace TOP10 ETF, listed on April 21, has a return of -8.78% and a trading volume of approximately 39.1 billion won.
Despite the asset management industry expanding its lineup of space-related ETFs in response to the growing perception of the space industry as a next-generation growth theme, short-term performance has fallen short of expectations. This is attributed to profit-taking in technology stocks on the U.S. market and the inherent volatility of the aerospace industry, which is characterized by low visibility in earnings. Some ETFs have a high concentration of defense stocks, making them susceptible to geopolitical risks and interest rate fluctuations.
An industry insider noted, "The space industry has significant long-term growth potential, but it is still largely driven by expectations. If major events like the SpaceX IPO materialize, the related ETF market could regain attention."
* This article has been translated by AI.
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