The 3rd marks Korea's National Foundation Day, observed in the year 4359 of the Dangi calendar, which commemorates the mythical founding of the nation. Ahead of the holiday, we reviewed the performance of the capital market's signature "patriotic investment" products. Funds launched during past financial crises and trade disputes, drawing on public support, were once criticized as emotional marketing. But they have delivered solid long-term returns and are evolving into performance-driven products that help build national wealth and lift shareholder value.
The oldest group consists of conventional equity funds created to help the country overcome the 1997 foreign exchange crisis and nurture leading domestic companies. KB Asset Management's KB Korea Star, launched in 2006 and now in its 20th year, carries on the investment philosophy of Hyundai Securities' Buy Korea fund, which drew nationwide attention in 1999. The fund invests regardless of market conditions, concentrating on companies expected to improve corporate governance — a longstanding weakness of the Korean stock market — and on undervalued large-cap blue chips. It also features a shared-growth model under which 10 basis points of sales fees and 5 basis points of management fees are set aside within the fund and returned as public-interest funding for causes such as children who go without meals and welfare for people with disabilities. As of the previous day, its Class A shares had returned 105.11% over the past year and 753.59% since inception.
Korea Investment Management's Korea Investment Retirement Pension Korea Power Securities Feeder Fund, set up in 2006, is another long-running growth fund that invests in global leaders driving Korea's economic growth. It pursues a strategy of identifying growth at a reasonable price (GARP) and holding those stocks for two to three years. As of Sept. 21, the two semiconductor heavyweights — Samsung Electronics at 31.76% and SK hynix at 23.68% — accounted for more than 55% of the portfolio, which also holds core manufacturing exporters with proven global competitiveness, including Samsung Electro-Mechanics, LS and Hyundai Mobis. Its Class C shares returned 107.21% over the past year and 1,048.22% since inception.
NH-Amundi Pilseung Korea, which has come to symbolize technological sovereignty, has transformed itself from a materials, parts and equipment fund into a global infrastructure fund. Launched in 2019 to support self-reliance in materials, parts and equipment after Japan restricted exports of three key semiconductor materials, the fund sets aside 50% of its management fees for scholarships at universities and research institutes in the sector and for research and development funding. Building on gains in localizing key materials, it has recently broadened its scope beyond semiconductors to export leaders in areas where Korean industry stands out, including transformers and power equipment, nuclear power and AI infrastructure. Its net assets have grown to about 3 trillion won ($2.1 billion). The fund returned 146.62% over the past year and 641.94% since inception.
Among exchange-traded funds, which now lead the market, two new themes stand out: performance-driven export patriotism and structural reform of the capital market. Mirae Asset Global Investments' TIGER K Defense & Space covers the four system integrators that export finished weapons — Hanwha Aerospace, KAI, Hyundai Rotem and LIG Nex1 — along with smaller but competitive suppliers in satellites and aerospace. It invests in companies that have won large overseas orders amid the war in Ukraine and conflict in the Middle East, advancing both self-reliant defense and dollar earnings. The ETF returned 5.18% over the past year.
Samsung Asset Management's KODEX Korea Value-up is a new patriotic product aimed at raising domestic market valuations at a time when retail investors are piling into U.S. stocks. Tracking the Korea Exchange's Value-up index, it spreads investments across 100 listed companies that are active in shareholder returns through share buybacks, cancellations and higher dividends. It returned 129.36% over the past year.
