Mirae Asset's 'TIGER China Electric Vehicle SOLACTIVE ETF' Surpasses 700 Billion KRW in Net Assets

[Asia Economy Reporter Minji Lee] Mirae Asset Global Investments announced on the 7th that the ‘TIGER China Electric Vehicle SOLACTIVE ETF’ surpassed 700 billion KRW in net assets as of the closing price on the 2nd, becoming the largest overseas equity ETF in the industry. This was achieved just four months after its listing in December last year.

The increase in interest in the electric vehicle theme and its recognition as an ETF available for pension investment led to an inflow of individual funds. The TIGER China Electric Vehicle SOLACTIVE ETF is the top ETF in terms of net individual purchases this year, with approximately 600 billion KRW inflows until last month.

The TIGER China Electric Vehicle SOLACTIVE ETF tracks the Solactive China Electric Vehicle Index. The index is composed of the top 20 companies by market capitalization engaged in electric vehicle-related manufacturing and sales, listed in Shanghai, Shenzhen, Hong Kong, and the United States, with headquarters in China. The index includes companies such as Shenzhen Inovance Technology Co Ltd, the market leader in Chinese converters and servo markets; Eve Energy Co Ltd, which holds 60% of the Chinese lithium primary battery market; and BYD Co Ltd, the world’s second-largest and China’s largest electric vehicle company, as well as the second-largest in the Chinese battery market.

China’s low automobile penetration rate and government encouragement of electric vehicle sales are expected to expand the related market. The number of cars per 1,000 people in China is about 200, roughly half of South Korea’s approximately 500. The Chinese government aims to have new energy vehicles account for more than 25% of total vehicles by 2025 and has announced various policies such as mandatory electric vehicle sales and subsidies to promote electric vehicle adoption.

Increased demand from overseas markets, especially Europe, is also anticipated. Europe began regulating carbon dioxide emissions in 2021 and will ban the sale of internal combustion engine vehicles starting in 2030. China plans to supply batteries and electric vehicle-related parts and export finished products to Europe, which is emerging as the world’s largest electric vehicle sales market.

This product can be used as a pension product from a long-term investment perspective. From 2023, a 20% capital gains tax is imposed on domestic stocks, while overseas stocks benefit from tax deferral on capital gains and dividends, increasing the attractiveness of using this as a pension product. Upon pension receipt, a low separate taxation rate of 3.3% to 5.5% applies, and due to the nature of ETFs, the 0.23% transaction tax is exempted, allowing for tax savings in multiple ways.

Kwon Oh-sung, Head of ETF Marketing at Mirae Asset Global Investments, stated, “With growing interest in environmental issues and advancements in battery technology, the electric vehicle market is expanding and related industries are growing. Rather than focusing on individual stocks, it is advisable to invest long-term in themes and sectors aligned with trends through ETFs.” He added, “Mirae Asset will continue to discover and commercialize various investment themes to provide investment opportunities to customers.”

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