"Volatile Market, Diversified Investment is Stable... Focus on EMP Funds"

Lee Changheon Head, Strong Long-Term Performance Through Risk Management... Gold ETF Promising

[Asia Economy Reporter Minji Lee] "As stock market volatility increases, it is essential to diversify investments across various asset classes to manage risk."

On the 11th, Lee Chang-heon, Head of the EMP Division at Mirae Asset Global Investments, stated that during times of increased market volatility, attention should be paid to EMP funds that can generate stable returns at low costs. Photo by Mirae Asset Global Investments

On the 11th, Lee Changheon, Head of the EMP Division at Mirae Asset Global Investments, emphasized in an interview with Asia Economy that at this time of heightened volatility, attention should be paid to EMP (ETF Managed Portfolio) funds, which can generate stable returns at low costs. Lee explained, "As the COVID-19 issue has expanded into a problem affecting all countries globally, no one can easily predict the direction of the stock market," adding, "It is also unclear whether market control can be achieved through policy efforts by each country."

EMP funds are portfolios composed of exchange-traded funds (ETFs) based on major global asset classes, combined according to investment objectives. As of last year, there are about 7,000 ETFs listed worldwide. Their greatest strength lies in the ability to achieve favorable returns even in rollercoaster markets by diversifying investments across ETFs of various countries, assets, and industries at a lower cost than general funds.

EMP funds are stronger in long-term performance rather than short-term. This is because they pursue stable returns over the long term through excellent risk management via asset allocation. Lee said, "Looking back on the most challenging times as a fund manager, it was when unexpected issues like COVID-19 affected the market rather than when predictions were wrong," emphasizing, "To survive in the long run, it is necessary to manage unforeseen risks."

As investor demand for these funds grows, products focusing on alternative investments and commodity ETFs have recently emerged. Lee predicted that investor demand for thematic ETFs such as gold ETFs, cloud computing, electric vehicle batteries, and millennial generation consumption may increase in the future. He said, "In a situation where major countries are mobilizing monetary and fiscal policies due to COVID-19, gold ETFs will continue to benefit," adding, "Thematic ETFs allow investment in trends that can bring structural changes in the future, so I view their growth potential highly."

However, since the domestic EMP market is still in its infancy compared to major countries, there is a need for an environment that can incorporate a variety of assets. Lee added, "From the perspective of asset allocation, the domestic ETF lineup lacks a significant portion of overseas asset classes," and "More core lineups need to be listed and gain higher competitiveness for the domestic EMP market to grow further."

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