▲ AI PRISM* Personalized Economic Briefing
* Editor's note: AI PRISM (Personalized Report & Insight Summarizing Media) is an artificial intelligence-based personalized news recommendation and summary service developed with support from the Korea Press Foundation. It selects and provides six tailored news items for each reader type.
[Key Issue Briefing]
■ Chip Duo Rally: The KOSPI reclaimed the 7,000 level for the first time in seven trading sessions, fueling expectations of a breakout from a range-bound market that had persisted for more than two months. With the concentration in Samsung Electronics (005930) and SK hynix (000660) — cited as the cause of the earlier slide — easing after a correction, surging memory chip exports and upbeat forecasts from foreign investment banks are supporting the rebound.
■ Long-Term Bond Losses: Losses are dragging on for investors in U.S. long-term Treasury exchange-traded funds listed in Korea after the U.S. Federal Reserve raised its benchmark rate for the first time in three years. Because these products are used mainly by monthly dividend investors seeking stable cash flows, the burden of losses has spread widely as high rates persist.
■ Active ETFs: Active products are projected to expand to 20% of the global ETF market by 2030. Korea has risen to the highest level in the Asia-Pacific region in terms of active ETFs as a share of assets under management, but regulatory conditions that block the entry of global asset managers remain a challenge, analysts said.
[Top News for Financial Product Investors]
1. Chip Duo Eases Concentration Risk, Lifting KOSPI Out of Range
- Key points: The KOSPI closed at 7,007.72 on the 21st, up 113.49 points, or 1.65%, from the previous session, returning above 7,000 for the first time in seven trading days. Chip-related shares were broadly strong, with Samsung Electronics up 4.98% and SK Square (402340) up 4.45%. Samsung Electronics rose to 274,000 won for the first time in 10 trading sessions. The combined weighting of Samsung Electronics and SK hynix in the KOSPI's market capitalization fell to 45.86% on Aug. 10 from 57.11% on June 25, then recovered to 51.28% on the day, prompting brokerages to say the easing concentration had improved the market's underlying condition. The Korea Customs Service said memory chip exports came to $21.5 billion from Sept. 1 to 20, up 350.7% from a year earlier, while Goldman Sachs set a target price of 490,000 won on Samsung Electronics with a buy rating.
2. Average Return of -5.9% This Year: U.S. Long-Term Bond ETF Investors Left Anxious
- Key points: The 14 exchange-traded funds listed in Korea and based on 30-year U.S. Treasurys posted a combined year-to-date return of -5.9% as of the 21st. The largest by net assets at 1.4824 trillion won, ACE US 30Y Treasury Active (H), returned -4.73%, while the unhedged ACE US 30Y Treasury Active returned -7.98%. RISE US 30Y Treasury Active was the weakest at -10.82%. The declines came as the 30-year U.S. Treasury yield rose from 4.616% at the end of February last year to above 5.3% this month, hitting longer-maturity bonds hardest. Park Jun-woo, a researcher at Hana Securities, said uncertainty over the terminal rate level is in fact growing, while Kim Sung-soo, a researcher at Hanwha Investment & Securities (003530), said it is a reasonable time to buy for those able to invest over the long term.
3. Global Active ETF Share to Rise to 20% by 2030
- Key points: Philippe El-Asmar, head of ETFs for Asia-Pacific at JPMorgan, said in an interview with Seoul Economic Daily that active ETFs, currently about 12% of the global ETF market at $2.8 trillion, will grow to 20%, or $6 trillion, by 2030. He cited as advantages that active ETFs, while charging higher fees than passive products, pursue alpha returns above the index and cover a broader range of assets including mortgage-backed securities and high-yield bonds. According to a JPMorgan Asset Management report, active ETFs accounted for $70 billion of Korea's $330 billion in ETF assets under management as of the end of June, or about 21% — the highest in the Asia-Pacific region and second-highest globally. He cautioned, however, that single-stock leveraged and inverse products require particular care because of their volatility, and forecast that broad-based equity and bond ETFs with stronger diversification characteristics would become mainstream over the long term.
[Reference News for Financial Product Investors]
4. [Investment Window] Why Pensions Need Korean Equities Too
- Key points: Target date funds — funds that automatically adjust asset allocations in line with a retirement date — have established themselves as the flagship retirement pension product, with net assets of 25.6 trillion won at the end of last year, up 55% in a year, and a return of 13.7%, more than double the average for retirement pensions. Yet TDFs managed in Korea allocated an average of 43% to U.S. assets last year, while domestic assets accounted for just 4.4%. A rule revision in April this year recognized domestic-only TDFs as qualified TDFs, and the first such product was listed in ETF form in August. Domestic TDF ETFs can avoid direct currency risk without hedging costs and allow a core-satellite strategy built around the KOSPI 200 as the core asset, making it possible to adjust country allocations when used alongside existing global TDFs.
5. Borrowing to Go All-In on OpenAI: SoftBank Issues 15 Trillion Won in Junk Bonds
- Key points: SoftBank Group will issue $10 billion (about 13.83 trillion won) and 1 billion euros (about 1.59 trillion won) of speculative-grade bonds, or junk bonds, to raise funds for its OpenAI investment, Bloomberg reported on the 21st. Excluding distressed debt exchanges, it is the largest such issue ever by a single company, and the proceeds will go first to the third tranche of follow-on OpenAI investment due to be paid on Oct. 1. Since pledging $65 billion (about 90 trillion won) to OpenAI, SoftBank has expanded borrowing, including raising the limit on a margin loan secured by Arm shares to $25 billion. Borrowing costs have also risen: the yield on its dollar bonds maturing in 2031 climbed to 8.2% this month from a low of 6.7% in January, and the cost of insuring against default reached its highest level in three years.
6. Fuel Runs Dry at 15% of French Stations; U.S. Diesel Tops $6.5 for First Time
- Key points: As the energy supply shock from the Middle East drags on, at least one of gasoline or diesel was sold out at 15% of roughly 9,900 service stations across France, French broadcaster TF1 reported on the 20th. Intensifying clashes between the United States and Iran have reduced tanker traffic through the Strait of Hormuz, and a drone strike halted operations on Saudi Arabia's East-West pipeline, pushing European diesel prices to a record 2.39 euros per liter. In the United States, diesel topped $6.5 per gallon for the first time ever, while the price of Group III base oil, a raw material for synthetic motor oil, quadrupled since February this year to $12.45 per gallon. According to International Energy Agency data, the number of countries providing direct fuel subsidies rose to 38 from 16 in four months, and the number implementing consumer support measures related to fuel costs expanded to 94.
▶Read the full article: Fuel Runs Dry at 15% of French Stations; U.S. Diesel Tops $6.5 for First Time
▶Read the full article:In Step With Trump, Jensen Huang Emerges as Key Ally in AI Regulation Fight
▶Read the full article: Average Return of -5.9% This Year: U.S. Long-Term Bond ETF Investors Left Anxious
