Recent fluctuations in the domestic stock market (KOSPI) have been attributed to concerns over an artificial intelligence (AI) bubble. Amid fears that the AI boom is overvalued compared to its revenue-generating potential, semiconductor stocks have seen significant declines. Many investors are left wondering, 'Is the AI boom over?'
Kim Nam-Ui, head of the ETF strategy division at Timefolio Asset Management, addressed this question in an interview with Aju Economy on August 4. He stated, "If you ask whether the AI boom is over, my answer is the opposite. It is not over; it is just beginning."
Throughout the interview, Kim emphasized the importance of focusing on long-term trends rather than short-term market fads. He defined active ETFs as "the most passive investment." In times of high volatility, he suggested that investors should pay attention to active ETFs, which allow experts to adjust portfolios according to market changes while investors can concentrate on their daily lives. He likened active ETFs to chameleons that change color based on market conditions.
AI Investment is Just Beginning; Active ETFs are ChameleonsKim predicted that AI will continue to be a key driver in the market for the second half of the year. However, he stressed that merely focusing on the semiconductor industry would not suffice to keep up with market changes.
He explained, "The AI industry encompasses various sectors, including semiconductors, power, data centers, telecommunications, and optical communications. Market interest constantly shifts, so it is crucial to understand the trends within these specific industries."
He added, "Memory semiconductors may gain attention, but at any moment, companies related to optical communications or data centers could become the market's focus. It is not easy for average investors to keep up with all these trends."
This is why Kim believes the role of active ETFs is vital. Experts can adjust investment proportions according to market conditions, allowing investors to manage their assets from a long-term perspective.
Kim stated, "Active ETFs are indeed the most passive investment. Investors should focus on their daily lives while asset managers respond to changing market environments."
Young Investors Need a Philosophy in a Time When Salaries Can't Buy HomesHe noted that the investment culture in South Korea has significantly changed since the COVID-19 pandemic. In the past, individual stock picking was the norm, but now a culture of diversified investment using ETFs has taken hold.
Kim remarked, "As the pension market grows and investment experience accumulates, investors' expectations have also risen. With the emergence of various products like bond funds, monthly dividends, and covered calls, the range of investment options has expanded."
The rise of automated dollar-cost averaging services through mobile trading systems (MTS) has also contributed to the growth of the ETF market.
He shared his thoughts on young investors, stating, "The current generation finds it challenging to buy homes solely on their salaries. It is natural for them to consider investing as a means of asset formation."
However, he cautioned against excessive focus on specific stocks and leveraged products. He emphasized, "The key is to establish a personal investment philosophy and view the market from a long-term perspective."
Timefolio's Differentiation Lies in a System, Not a Single ManagerKim identified Timefolio's greatest competitive advantage as its hedge fund-based management capabilities. Rather than relying on a single manager, the firm has established a multi-manager system where multiple experts collaborate on investment decisions.
He stated, "Relying on one person's judgment can be risky. We minimize risks through a system where experts from various fields discuss and validate decisions together."
Kim also expressed disappointment with the domestic ETF market, noting that the repetitive launch of similar products has diminished market diversity. He asserted, "Each asset management company must develop its unique characteristics and competitiveness for the market to grow healthily, and investor education and regulatory improvements must also be pursued."
Regarding the market outlook for the second half of the year, he maintained a cautious stance. He advised, "Now is not the time to make drastic changes to portfolios. It is essential to maintain a balance between growth and defensive stocks while observing the market calmly."
* This article has been translated by AI.
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