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| Kim Sung-hoon, head of ETF Strategy & Business Development at Hanwha Asset Management, introduces the new exchange-traded fund (ETF) product tracking Japan's chip-related companies, during a press conference in Seoul, Thursday. Courtesy of Hanwha Asset Management |
Japanese yen to be on gradual recovery track
By Lee Min-hyung
Hanwha Asset Management launched an exchange-traded fund (ETF) investing in Japanese materials, components and equipment industries amid growing investor interest in the Japan's high-tech semiconductor-related companies.
The ARIRANG Solactive ETF invests in 20 Japanese tech-savvy firms in the chip industry. They include Tokyo Electron, Hoya and Nippon Sanso Holdings ― all of which are listed on the Tokyo Stock Exchange. This is the first ETF tracking Japan's chip-focused companies launched by a Korean asset management company.
"We decided to launch the ETF to introduce Japan's promising industrial areas and offer more diverse investment alternatives there at a time when most listed ETFs here track Japan's representative stock indices such as Nikkei or TOPIX," Kim Sung-hoon, head of ETF Strategy & Business Development at the asset manager, told reporters during a press conference, Thursday.
Japan has traditionally maintained competitive edges in the chip-related materials, components and equipment industries. Global chipmakers such as Samsung Electronics and TSMC have also expanded investments there in line with the Japanese government's strong incentives for overseas companies.
The country is considered an emerging strategic hub for investment in Asia amid escalating geopolitical risks between the United States and China, according to the asset management arm of Hanwha.
The asset manager did not take into serious consideration the prevailing negative public sentiment on Japan's release of radioactive water from the Fukushima nuclear plant. Despite the negative perception, global companies are increasing their investment in the Japanese market, so the issue has little to do with potential investment returns there, according to the company.
The Hanwha affiliate also argued it is quite timely for investors focus on the Japanese market, as they can benefit from a weak yen and the country's stock market recently saw share prices drop, the ETF chief of Hanwha said.
NH Investment & Securities analyst Kim Chae-yoon, who also joined the press conference, said the Japanese yen will be on track for a gradual recovery against the U.S. dollar.
"The interest rate gap between the U.S. and Japan will be reduced on hopes for the U.S. Fed's end to the cycle of rate hikes and Japan's monetary policy normalization," the analyst said. "We expect the yen to switch to a bullish turn sometime after the end of the fourth quarter of this year."
Starting last year, Hanwha Asset Management is on track to diversify its ETF product lineups encompassing both long-term and short-term investment in areas such as aerospace, defense, solar energy and artificial intelligence. The firm's net asset is worth 2.79 trillion won as of Tuesday, up 93 percent from the previous year.
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