Samsung may appear seemingly everywhere – on phones, refrigerators, televisions and other devices. Yet, for most investors, the tech brand is unlikely to appear in fund titles of their portfolio. That is, until now.
Investors seeking more income ETFs focused on overnight lending rates have a new fund to consider.
On November 15, Samsung Asset Management, in partnership with Amplify ETFs, launched the Amplify Samsung SOFR ETF on the New York Stock Exchange (NYSE), Arca, under the ticker “SOF.”
The actively managed fund seeks to deliver current monthly income and reduce risk exposure. It also will attempt to deliver the monthly income and total return of the Secured Overnight Financing Rate (SOFR) after fees and expenses. Since June this year, the SOFR has served as the best standard benchmark for interest rates for dollar-denominated derivatives and loans. The SOFR was 5.32% as of November 8.
Samsung AM was the first to launch an overnight interest income ETF in South Korea, but SOFR represents its first U.S.-listed ETF. The CEOs of both Samsung AM and Amplify said it was a great honor to collaborate with one another on the fund.
Christian Magoon, the CEO of Amplify ETFs, said investors are shifting to income-producing investments amid market uncertainty. It is for this reason Amplify ETFs is really zeroing in on income this year.
“I know rates are rising, and people are getting a little bit more in their savings account,” Magoon said. “But there's so much more you can do on the ETF side to really boost your income for above-average returns over time.”
SOF is just one example of Amplify's push deeper into the income space.
Samsung, too, is following an emerging trend as its South Korean compatriots debut their first-ever U.S.-listed funds.
Samsung's first foray into ETFs follows on the heels of fellow Seoul-based conglomerate LG, who also launched its first-ever ETF on the NYSE just this month.
“We don't have a financial business in our portfolio…we are trying to test the waters now,” LG AI Research's Young Choi told the Financial Times.
The fund, the LG Qraft AI-Powered US Large-Cap Core ETF (“LQAI”), was launched in conjunction with fund manager Qraft Technologies. LQAI uses LG's specialized algorithm to optimize its holdings of 100 large US companies and adjusts its positions every four weeks in an effort to outperform the S&P 500.
The co-managers claim LQAI will “seek patterns and signals that may be challenging for humans to identify at that speed and scale.” The fund is driven by a deep neural network that will analyze macro variables, fundamental data, and market trends.
All that superhuman computing power doesn't come cheap, though. However, the difference in management costs between the two is stark.
While LQAI comes with an expense ratio of 0.75 percent, SOFR will only charge investors 0.2 percent per annum.
This article was produced and syndicated by Wealth of Geeks.