With hope and concern over the artificial intelligence industry running side by side, diversification strategies that pair benchmark U.S. equity indexes with traditional assets are drawing attention again. Blended exchange-traded funds that track the growth of the U.S. Standard & Poor's 500 index while hedging volatility through gold are emerging as an investment alternative.
About 1.2 trillion won flowed into U.S. S&P 500 ETFs listed in South Korea last month, according to FnGuide data released on the 16th. Net buying by retail investors accounted for roughly 770 billion won of that total. Over the same month, individuals sold more than 1 trillion won worth of ETFs tracking Korea's benchmark indexes and semiconductor shares. The shift reflects a broader move toward diversifying across the U.S. market as a whole rather than betting on specific sectors, as volatility in the domestic market increases.
Still, the S&P 500 carries a heavy weighting of large-cap technology stocks and is not insulated from AI-related volatility, which has turned investor interest toward asset allocation strategies that hold both equities and safe-haven assets. Kiwoom Asset Management's KIWOOM U.S. S&P500 & GOLD ETF packages a benchmark U.S. index and gold into a single product. The fund tracks the S&P 500 & S&P GSCI Gold 90/10 Blended Index, investing 90% of assets in the S&P 500 and the remaining 10% in spot gold. The weightings of the two assets are automatically reset to 90-10 each quarter.
The structure is designed to capture gains and spread risk at the same time. Gold is regarded as an asset that can partly cushion equity losses when stock markets drop sharply or geopolitical uncertainty builds. The correlation coefficient between the daily returns of the underlying index and the S&P 500 is about 0.99, allowing the fund to closely follow U.S. market moves while diversifying downside risk through its gold holdings.
The fund is also easy to use for long-term installment investing, according to the firm. Investors do not need to buy S&P 500 ETFs and gold ETFs separately and adjust the weightings themselves, and because rebalancing takes place inside the product, they can avoid the tax burden that comes with trading on their own. The total fee is 0.01% a year, and the fund is available through defined contribution (DC) retirement pension accounts, individual retirement pensions (IRP) and pension savings accounts.
"The longer the investment horizon, the more important it becomes to have a strategy that can respond to volatility, not just returns," said Lee Kyung-jun, head of the ETF management division at Kiwoom Asset Management. "With low fees and regular rebalancing, this will be an optimal vehicle for steadily accumulating both the S&P 500 and gold."