The Golden Age of ETFs... Will They Surpass 500 Within the Year?

ETF Launches One After Another
Aiming to Absorb Stock Market Drift Funds
Active ETFs to Launch in the Second Half

[Asia Economy Reporter Junho Hwang] The era of Exchange-Traded Funds (ETFs) has arrived. As the stock market, which was on an upward trend last year, has stalled this year, ETFs targeting drifting stock market funds are being launched one after another. Most of these ETFs utilize popular themes in the stock market, and this trend is expected to continue.

15 ETFs Launched This Year... 8 More Next Month

According to the asset management industry on the 23rd, a total of 15 ETFs have been launched from the beginning of this year until now. Compared to only one ETF launched during the same period last year, it is analyzed that ETF launches have been competitive this year. As a result, the total number of ETFs currently stands at 476 and is expected to exceed 500 within the year. Of the 47 ETFs launched last year, 40 were launched in the second half of the year.

The ETFs launched this year are characterized by following themes that are popular in the stock market. ETFs have been composed using themes that have attracted attention this year, such as eco-friendly and renewable energy, hydrogen vehicles, and 5G. In particular, with growing interest in ESG (Environmental, Social, Governance), ETFs reflecting this, such as carbon-efficient Green New Deal ETFs, have also been launched.

ETFs investing in overseas markets have also been released consecutively. Most of these are products investing in technology stocks such as semiconductors. As interest in overseas stock markets like the U.S. and Europe has increased to the extent that the term Seohak Gaemi (overseas stock investors) has emerged, these products can be seen as attracting their funds. Subsequently, ETFs tracking representative indices of the U.S. and Europe have been launched to attract investments through retirement pensions. Although there were many ETFs tracking representative indices before, investments within retirement pensions were not possible due to futures operation methods.

With a flood of products that investors interested in the stock market can intuitively invest in, the 15 ETFs launched this year have attracted a total of 416.925 billion KRW (net asset value) as of the 17th. The current total net asset size of ETFs is 57.859 trillion KRW, an increase of about 10.59% compared to 52.3145 trillion KRW at the beginning of the year. Weekly returns ranged from -2.29% (TIGER U.S. Philadelphia Semiconductor Nasdaq) to 4.09% (HANARO Fn Electric & Hydrogen Vehicles).

ETFs Resembling Stock Market Themes Like Renewable Energy and Electric Vehicles

[Image source=Yonhap News]

Starting next month, a total of 8 active ETFs will be launched. Samsung Asset Management will release ETFs investing in renewable energy and automobiles; Mirae Asset Management will offer ETFs focused on future mobility and overseas battery, bio, internet, and games (BBIG); Korea Investment Management will launch ETFs investing in eco-friendly automobiles and ESG (Environmental, Social, Governance). Timefolio Asset Management will release KOSPI index-type and domestic BBIG ETFs.

Active ETFs are products that can adjust the included stocks and their weights according to market conditions. Among domestic investors, the ARK Innovation ETF (ARKK) introduced by Cathie Wood, CEO of Ark Investment, known as the "Money Tree Sister," is well known for achieving a 149% return through investment in the U.S. electric vehicle manufacturer Tesla.

An industry insider said, "ETFs have the advantage of being simpler than funds because they can be invested in by trading stocks," adding, "If the stock market continues to grow and funds keep flowing into ETFs this year, the number of ETFs will naturally increase."

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