Last Year ETF Surpassed 50 Trillion Won... 150 Times Growth in 17 Years

Average Return Rate 6.54%... Overseas Major Index Tracking Stocks Especially High
Achieved Record High Performance but Still 2.8% of Stock Market Size
Below US, Germany, UK Exceeding 11%... Significant Growth Potential

Provided by Korea Exchange

[Asia Economy Reporter Minwoo Lee] Last year, the total net assets of exchange-traded funds (ETFs) surpassed 50 trillion won. This marks a 150-fold growth over 17 years since the market's inception. Given that the ratio of ETF market capitalization to the stock market capitalization is still about one-quarter of that in major overseas markets such as the United States, there are expectations for further growth in the future.

◆150-fold growth over 17 years: "More room for future growth"= According to the Korea Exchange on the 7th, the total net assets of the domestic ETF market reached 51.7 trillion won, an increase of 26.1% compared to the end of the previous year. Compared to 344.4 billion won at the market's inception in 2002, this represents more than a 150-fold increase. The number of listed ETFs also reached a record high of 450.

Among these, there were 62 large ETFs with net assets exceeding 100 billion won, preferred by institutional investors. This is an increase of 9 from the end of the previous year. The ETF with the largest net assets was 'KODEX 200,' holding 9.3 trillion won, accounting for 18% of the entire ETF market.

Last year, newly raised funds through additional settings (new listings of 858.2 billion won) amounted to 6.7 trillion won. The ETF with the largest inflow of funds was KODEX 200, which attracted a total of 1.3 trillion won. The second was 'TIGeR 200,' which saw an inflow of 1.1 trillion won.

However, the average daily trading volume was 1.33 trillion won, down 8.8% from the end of the previous year. There were 15 ETFs with high liquidity and average daily trading volumes exceeding 10 billion won, one fewer than the previous year. This is attributed to the overall sluggish trading in the stock market. In fact, the average daily trading volume of the KOSPI market last year was 5 trillion won, a 23.8% decrease from the previous year. The ETF with the highest average daily trading volume was KODEX Leverage, with 206.4 billion won, accounting for 15.3% of the total average daily trading volume. The trading proportions were 38.6% individual investors, 32.7% institutions, and 28.7% foreigners.

Meanwhile, the ratio of the domestic ETF market's total net assets to the stock market capitalization was 2.8%, about one-quarter of the United States' 11.7%. Compared to other major overseas markets such as Germany (11.3%), the United Kingdom (10.4%), and Japan (6.4%), it remains low. This is why there is an interpretation that the domestic ETF market has room for further growth.

Provided by Korea Exchange

◆Average return of 6.54%: "Expansion of income-type and global products"= The average return of ETF stocks was 6.54%. There were 259 rising stocks, more than the 143 declining stocks. The average return of domestic equity ETFs was 7.83%, 0.16 percentage points higher than the KOSPI index (7.67%).

The highest returning ETF was 'TIGeR China CSI300 Leverage (Synthetic),' which recorded 79.8% thanks to the rise in the Chinese stock market in the first half of the year. Additionally, ETFs tracking major overseas market indices such as CSI300 and S&P500 (including four leveraged ETFs) occupied the top five in returns. On the other hand, the lowest returning ETF was 'KODEX WTI Crude Oil Futures Inverse (H),' which showed a negative return of 32.7%.

Due to the continued low interest rate environment and domestic and international economic uncertainties, the listing of 'income-type ETFs' has also increased. These income-type ETFs are actively listed based on regularly occurring cash income such as bond interest, dividends, and real estate rental income. The Korea Exchange plans to continue increasing the supply of such products next year.

Furthermore, to absorb investors' demand for direct overseas investment domestically, the exchange plans to promote the supply of various global products. A Korea Exchange official stated, "We will newly list ETFs linked to ESG (environment, social, governance), commodities, and other themes in line with global trends," adding, "We also plan to discuss with government authorities the improvement of the unequal tax system applied to domestically listed ETFs compared to direct overseas investments."

This content was produced with the assistance of AI translation services.