(Bloomberg) — South Korea’s first mutual fund dedicated to investing in the electronic-vehicle industry has cut its exposure to Tesla Inc. to the lowest level ever while shifting money into its Chinese rivals.
Most Read from Bloomberg
Juul’s Vaping Products Are Ordered Off the Market in the US
Elon Musk Says New Tesla Plants Are ‘Money Furnaces’ Losing Billions
These Are the World’s Most Liveable Cities in 2022
Recession Worries Boost Treasuries; Stocks Advance: Markets Wrap
The World’s Bubbliest Housing Markets Are Flashing Warning Signs
The Korea Investment Management Co. fund, a Tesla holder since inception in 2017, has steadily trimmed its exposure to the US carmaker this year to less than 3% of its net asset value, from as high as 9% in the past.
“We sought to lower volatility in the portfolio by reducing our exposure to stocks and taking profit in our top holdings,” Hwang Woo-taek, who manages the fund’s 1.15 trillion won ($887 million) assets, said in an interview.
Tesla Is No Longer Top Stock in Cathie Wood’s Flagship Fund
Some of the outflow from Elon Musk’s firm has trickled into China’s EV makers, with the Korean fund adding names including BYD Co. and Xpeng Inc. in March and April after “excessive drops,” Hwang said. It has also increased holdings in EV supply-chain stocks ABB Ltd. in Switzerland and US-based Eaton Corp. and lifted its cash holdings.
The fund has bested 98% of its peers over the past three years, riding the longer term success of Tesla, but has suffered a 20% loss so far in 2022. Hwang said he’s waiting for more innovation from Tesla, such as the launch of Cybertruck, before buying more.
Most Read from Bloomberg Businessweek
Can Crypto’s Richest Man Stand the Cold?
Juul Finds Hell Hath No Fury Like an Army of Really Rich Parents
The Global Currency Wars Have Begun Because, Well, Inflation
China’s Property Slump Is a Bigger Threat Than Its Lockdowns
The Age of Credibility for Central Banks Is Over
©2022 Bloomberg L.P.
