Money Flows Into Value-Up Funds as Defensive Products Fall Out of Favor

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1. Value-Up Funds Surge as Defensive Products Fall Out of Investor Favor

- Key Summary: The 22 domestic value-up funds have accumulated 1.30 trillion won in net assets this year, with 556.7 billion won flowing in this year alone, fueling their growth. Their return of 58.19% exceeded the KOSPI's rise of 46.93% and outpaced other fund types, including Samsung Group funds (49.06%), value stock funds (37.53%), and IT funds (20.70%). In contrast, target-date conversion fund assets fell by 1.27 trillion won since the start of the year, while monthly income funds declined by 389.4 billion won, with year-to-date returns stuck at 1.50%. "The fact that defensive products have lost popularity as value-up funds establish themselves as a mid- to long-term investment theme signals that investors' risk perception and capital management approaches have changed," an industry fund manager said.

2. KOSDAQ Rallies for 6 Sessions on Revived Sentiment...Will It Top 1,200?

- Key Summary: The KOSDAQ index closed at 1,170.04 on the 17th, extending its winning streak to six sessions since the 9th (1,076.00). The index has not closed above 1,200 since August 8, 2000 (1,213.7), before the index system was reorganized. A risk-on recovery on hopes for a U.S.-Iran ceasefire, along with retail investors' net purchases of 1.26 trillion won this month alone, drove the supply-demand improvement. Active ETFs, including Samsung Active Asset Management's KoAct KOSDAQ Active ETF (net assets of 1 trillion 43 billion won) and Timefolio Asset Management's TIME KOSDAQ Active ETF (498.3 billion won), also helped create favorable supply-demand conditions. Brokerages say further gains will depend on earnings improvements in leading sectors such as biotech and semiconductor materials/parts/equipment, as well as energy storage system (ESS) momentum meeting market expectations.

3. Iran War's GDP Shock in Focus...Warsh Confirmation "Vote Battle" Also in Spotlight

- Key Summary: The Bank of Korea will release the preliminary first-quarter real GDP growth rate on the 23rd. While the central bank initially projected around 0.9% based on strong semiconductor exports and base effects, downward pressure has intensified due to the Iran war. Domestically, attention is also focused on the potential replacement of the central bank head, as the confirmation hearing report for Shin Hyun-song, nominee to succeed BOK Governor Rhee Chang-yong, has been delayed. In the U.S., the confirmation hearing for Kevin Warsh, nominee for Federal Reserve Chair, will be held on the 21st, with uncertainty remaining as just one Republican defection could derail the confirmation. Tesla's first-quarter earnings release on the 22nd (local time) and the People's Bank of China's loan prime rate (LPR) announcement are also emerging as key variables for global financial markets.

4. "Korea's ETFs Are Now a Global Standard...Even the U.S. Is Benchmarking"

- Key Summary: Han Dong-hoon, Managing Director of Asia Business at U.S. ETF specialist Amplify ETFs, said, "When launching new products, we look at Korea's ETF market first," noting that global asset managers now view Korea as a trendsetter. Amplify's flagship product, "DIVO," combines dividends and options strategies to pursue both stable cash flow and upside participation simultaneously. The localized version, "KODEX U.S. Dividend Covered Call Active," has surpassed 1.5 trillion won in net assets, centered on domestic pension accounts. Regarding AI investment strategies, Han emphasized that an equal-weighted approach that diversifies across the value chain is more advantageous for managing volatility than concentration in big tech. Amplify plans to launch covered call products based on investment-grade corporate bonds and high-yield bonds in the U.S. this month through collaboration with Samsung Asset Management's U.S. subsidiary.

5. K Bank Down 25% Since IPO, Receives First "Buy" Report

- Key Summary: K Bank (279570) shares closed at 6,310 won on the 17th, down about 25% from the IPO price of 8,300 won. As of last year, K Bank's assets stood at about 40% of KakaoBank's, but net profit was only 23%, highlighting a clear profitability gap. In particular, the net interest margin (NIM) plunged from 2.4% in 2023 to 1.4% in 2025, cited as the main cause of deteriorating profitability, as the won-based deposit and withdrawal structure for Upbit customers pushed up deposit rates and funding costs. Samsung Securities (016360) became the first domestic brokerage to issue a "BUY" rating on K Bank, setting a target price of 9,000 won, with an analysis that profitability concerns have been excessively priced in. A Korea Investment & Securities analyst also raised the possibility of a valuation re-rating of K Bank as a specialized digital asset services bank, including stablecoins, once the Digital Asset Basic Act and promotion policies take full effect based on its partnership with Upbit.

6. Vinow Launches IPO Process...Second-Half K-Beauty Boom Is Coming

- Key Summary: Vinow, which operates skincare brand "Numbuzin" and makeup brand "Fwee," has begun preparations targeting a preliminary listing review filing in the second half, with last year's revenue surpassing 325 billion won and an expected market capitalization of approximately 1 trillion won. Goodai Global (last year's revenue of 1.47 trillion won, net profit of 233.7 billion won) has begun due diligence targeting a KOSPI listing within the year, with brokerages projecting a market cap of more than 10 trillion won based on annual net profit of 300 billion won. Grace (2025 revenue of 194.5 billion won) and cosmetics ODM company BNB Korea (last year's record revenue of 141.2 billion won) are also pushing for preliminary review filings within the first half. "Korean cosmetics are the most imported in the U.S.," an investment banking official said. "As the world's top cosmetics exporter, companies are pushing for listings this year on the strength of expanding overseas sales."