ETF Also Focuses on 'Themes' Rather Than Value Investing

[Asia Economy Reporter Junho Hwang] Style ETFs advocating value investing that entered the market are disappearing into the annals of history. This is the result of investors becoming more discerning and increasingly seeking transparent investment destinations and reliable returns. The void left by value stock ETFs will be filled by thematic active ETFs.

According to the asset management industry on the 26th, a total of eight ETFs will be delisted on the 7th of next month. Among them, three ETFs invest in value stocks. These are style ETFs managed by Mirae Asset Global Investments (2 types) and KB Asset Management (1 type). These ETFs joined late amid the value stock investment craze. At one point, hundreds of billions of won flowed in, but currently, the net assets under management are operating below 3 billion won. If the total net assets remain below 5 billion won for six months, the ETF may proceed to delisting.

The reason the asset management industry has decided to proceed with delisting is due to a change in liquidity flow trends. An industry insider said, "The concept of value stocks changes depending on the timing. For example, there are times when the financial sector performs well recently, and there are value stocks affected by market conditions such as shipping and shipbuilding." He added, "These days, the flow of funds tends to move skewed toward sectors or themes rather than investing by viewing a single stock as a value stock. Managers nowadays do not perfectly distinguish between value and growth."

As value stock ETFs are phased out, asset managers plan to focus on launching thematic ETFs. Next month, four asset management companies will launch eight active ETFs. Most of these products invest in future mobility means such as autonomous vehicles. An industry insider explained, "The goal is to focus on the hottest themes recently, like a single stock, to achieve the best returns."

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