Bae Jae-gyu, CEO of Korea Investment Management and widely known as the “ETF pioneer,” recently made a public appeal for investors to abandon short-term speculative trading mindsets and embrace long-term investment strategies, with a particular focus on future-defining industrial ecosystems such as artificial intelligence and semiconductors. He stressed that the desire for quick profits is often the primary cause of investment failure, and that missing out on the golden window of long-term compound growth due to frequent trading could result in potential losses amounting to thousands of times the original capital.<\/p>\n
Bae cited the perspective of renowned investor Howard Marks, noting: “I don’t know how to make money quickly, but I know how to lose it quickly: by trying to make money quickly.” He further illustrated this using the Nasdaq-100 Index’s compound annual growth rate of 15% as an example: an investment of NT$10 million today could grow approximately 2,180 times over 55 years, reaching NT$21.8 billion (approximately $676.9 million). If an investor can hold on for an additional five years, the assets would further leap to 4,300 times the original amount. He cautioned that a short-sighted mentality not only adds unnecessary risk but could also cause investors to miss out on enormous wealth.<\/p>\n
Bae believes that successful investing requires aligning with the trends of the era, deploying capital into the industrial “ecosystems” that are leading the way, rather than betting on a single hot stock. Using the AI industry as an example, he noted that its ecosystem encompasses Nvidia’s semiconductor design, Samsung Electronics and SK Hynix’s memory chips, TSMC’s wafer foundry services, and critical equipment suppliers such as ASML \u2014 all forming an interconnected industrial chain. He emphasized that even if certain individual stocks may deliver more spectacular gains in the short term, investing in the entire ecosystem is the correct and stable approach over a 20-year horizon.<\/p>\n
Regarding South Korea’s domestic market, Bae specifically highlighted five industries \u2014 semiconductors, automobiles, shipbuilding, defense, and nuclear energy \u2014 as sectors where South Korea possesses world-class competitiveness. He stated that South Korea not only holds key technologies in these industries but also has the actual manufacturing and construction capabilities, forming a complete industrial chain that is difficult to replicate. He suggested that rather than investing in the KOSPI 200 Index, which tracks the broader market, focusing on these five structurally advantaged industries would be a better choice.<\/p>\n
Bae also observed that while exchange-traded funds have grown rapidly in quantitative terms in the South Korean market in recent years, there remains significant room for improvement in qualitative application. He criticized the fact that many investors, due to the convenience of ETF trading, have instead turned them into tools for short-term speculation, failing to fully leverage their core advantages of risk diversification and long-term holding. He stressed the importance of investor education and expressed hope that South Korea’s investment environment would gradually evolve into one that is stable and conducive to long-term investing. Additionally, Bae noted that the recent rally in South Korea’s securities market is partly attributable to the “Value-up Program” promoted by President Lee Jae-myung’s administration, which includes three regulatory reforms: directors’ fiduciary duties to shareholders, separate taxation of dividends, and treasury stock cancellations. Combined with strong momentum in the semiconductor industry, these have become key catalysts driving stock prices higher.<\/p>\n
Bae’s remarks come against the backdrop of South Korea’s semiconductor giants delivering market-stunning results. Market reports indicate that following SK Hynix’s impressive earnings release, Samsung Electronics’ latest quarterly results also significantly exceeded market expectations. Samsung posted single-quarter revenue of \u20a9171.5 trillion (approximately $121.1 billion), up 130% year-over-year, while operating profit surged to \u20a989.49 trillion (approximately $63.2 billion), a staggering 1,813.8% increase year-over-year \u2014 both setting new all-time highs. The stellar performance of the two industry leaders forcefully rebutted earlier market concerns about an AI bubble and economic slowdown.<\/p>\n
Institutional analysts point out that AI infrastructure and server high-bandwidth memory demand are demonstrating explosive strength. SK Hynix’s profit momentum is primarily driven by four core engines: strong orders from AI GPU customers for fifth-generation HBM3E memory, an increasing proportion of high-value-added products such as high-capacity DRAM and enterprise SSDs, multi-year long-term supply agreements with global giants like Nvidia that ensure extremely high operational visibility, and the continued expansion of capital expenditure on AI server infrastructure by global cloud service providers. Nvidia CEO Jensen Huang has clearly stated that AI infrastructure is still in its early stages, with investment set to grow five to ten times over the coming years, indicating that the global memory market is heading toward structural growth.<\/p>\n
From a valuation perspective, South Korea’s stock market is currently experiencing a golden cross where technical, fundamental, and valuation factors are converging favorably. Industry insiders note that the washout of leveraged ETF and margin balance positions in South Korea’s stock market is nearing its end. Since the June peak, leveraged positions and margin balances have declined by more than 50%, far exceeding the roughly 40% correction in South Korean stocks over the same period. Currently, Samsung and SK Hynix trade at a price-to-earnings ratio of only about 6 times, well below the KOSPI 50 Index’s overall 10 times, with the significant undervaluation of semiconductor stocks being the primary reason for the market discount. South Korea’s estimated price-to-earnings ratio sits at a near 20-year historical low, making it the only major global stock market with a single-digit P\/E ratio, with re-rating momentum building.<\/p>\n
At the same time, Korea Investment Management is launching a new product in line with this trend. The “ACE Semiconductor PLUS Strategic Industry ETF,” set to list on August 11, features a portfolio closely aligned with the five competitive industries outlined by Bae. The ETF’s constituents include SK Hynix, Samsung Electronics, Hyundai Motor, Doosan Enerbility, Hanwha Aerospace, HD Korea Shipbuilding & Offshore Engineering, and Hyundai Mobis, among others. Sector weightings are: semiconductors 56.5%, humanoid robots and automotive-related 15.9%, defense 9.5%, shipbuilding 8.8%, and nuclear energy 9.3%, with a total expense ratio of approximately 0.4%. This allocation strategy echoes Bae’s emphasis that rather than chasing individual stocks, investors are better served by using an ETF to gain one-stop exposure to South Korea’s complete industrial ecosystems with global moats.<\/p>\n","protected":false},"excerpt":{"rendered":"Bae Jae-gyu, CEO of Korea Investment Management and widely known as the “ETF pioneer,” recently made a public…\n","protected":false},"author":2,"featured_media":100802,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[21224],"tags":[42473,38078,21234,42472,8160,37652,42474,37817,5359,34887,32644,37372],"class_list":["post-100801","post","type-post","status-publish","format-standard","has-post-thumbnail","category-bae","tag-ace-semiconductor-plus-strategic-industry-etf","tag-asml","tag-bae","tag-bae-jae-gyu","tag-bae-systems","tag-korea-investment-management","tag-kospi-50-index","tag-lee-jae-myung","tag-nvidia","tag-samsung-electronics","tag-sk-hynix","tag-tsmc"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@UnitedKingdom\/117071716200224639","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts\/100801","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/comments?post=100801"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts\/100801\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/media\/100802"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/media?parent=100801"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/categories?post=100801"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/tags?post=100801"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}