Samsung Asset Management's S&P 500 index fund crosses W1tr mark

Samsung Asset Management said Wednesday that its Samsung US S&P 500 Index Fund has become the first S&P 500-tracking public fund in South Korea to surpass 1 trillion won ($707 million) in net assets, measured on a master-fund basis.

The fund's net assets have grown to 1.004 trillion won from just over 200 billion won at the end of December 2023 — a gain of roughly 398 percent in about two and a half years.

A company official attributed the milestone to the fund's lineup structure, which allows investors to choose flexibly between a currency-hedged option and a currency-unhedged option based on their exchange rate outlook and risk appetite.

With the won-dollar exchange rate weakening from below 1,400 won a year ago to 1,555.8 won in July, investors poured money into the unhedged option to capitalize on the won's decline.

Over the past year, net assets in the unhedged option grew 82.0 percent, far outpacing the 29.4 percent growth recorded by the hedged option.

The fund's precise index-tracking capability has also bolstered investor confidence. Its tracking error rate — a measure of how closely the fund follows its benchmark index — stood at 0.6 percent over the past year. Over the same period, the hedged option returned 19.5 percent and the unhedged option returned 23.5 percent.

The Samsung US S&P 500 Index Fund invests in 500 leading US companies, including Nvidia, Apple, Alphabet and Visa.

"The S&P 500 index has delivered an average annual return of around 10 percent over the past 30 years, cementing its status as a core global benchmark," said Ryu Jong-ha, a fund manager at Samsung Asset Management. "A broadly diversified S&P 500 portfolio is a proven investment alternative that can effectively participate in the long-term growth of the US economy while mitigating the volatility risk of individual sectors."

Samsung Asset Management's Samsung Global Semiconductor Fund also crossed the 1 trillion won threshold in June. That fund invests in global chipmakers expected to benefit directly from the growth of the AI industry, with a focus on the top 20 companies worldwide by semiconductor sales.