ETF Net Assets Surpass 70 Trillion Won... Will It Reach 100 Trillion Next Year?

Stock Market Cooling Shifts Ants' Attention
Increased by 36.2% Compared to End of Last Year

[Asia Economy Reporter Junho Hwang] The net assets of Exchange-Traded Funds (ETFs) have surpassed 70 trillion won. As the stock market remains trapped in a box range, retail investors known as Donghak Ants have turned their attention to ETFs, leading to rapid growth in scale. Asset management companies are absorbing funds by continuously launching products tailored to the tastes of retail investors, raising cautious expectations that the 100 trillion won mark could be crossed next year.

According to the Korea Financial Investment Association on the 24th, ETF net assets reached 70.3947 trillion won as of the 19th, surpassing 70 trillion won. As of the 22nd, the figure stands at 70.8802 trillion won. This represents a 36.21% increase from 52.0365 trillion won at the end of last year. Compared to the total net assets of public funds excluding discretionary investment of 336 trillion won, the share expanded from 18.94% at the end of last year to 21.10%. Including discretionary investment, the share of total public fund net assets also rose from 3.93% to 4.85%.

This is the result of funds from retail investors wandering in the stock market flowing into ETFs. Despite institutions selling 8.1977 trillion won this year (foreign investors net buying 272.5 billion won), individuals poured 7.8138 trillion won into ETFs. As the KOSPI index rose to the 3300 level and then slipped to 2900 this year, making it difficult to find direction in the stock market, many chose to entrust their funds to experts and watch for a market revival. The main products purchased were Mirae Asset Global Investments’ TIGER China Electric Vehicle SOLACTIVE and TIGER US Nasdaq 100, each exceeding 1 trillion won in purchases. Consequently, Samsung Asset Management, the industry leader in ETFs, saw its market share drop from 51.71% at the end of last year to 43.08%, while Mirae Asset’s share jumped from 25.17% to 34.80%.

On the 23rd, the KOSPI started in a downward trend at the Hana Bank dealing room in Jung-gu, Seoul. The KOSPI opened at 3013.16, down 0.09 points (0.00%), and the KOSDAQ index began trading at 1024.33, down 7.98 points (0.77%). The won-dollar exchange rate started at 1190.5 won, up 5.4 won. Photo by Kim Hyun-min kimhyun81@

Observing the influx of retail investors and the industry’s paradigm shift, asset management companies are responding swiftly by launching products that cater to retail investors’ preferences. The number of ETFs, which was only 468 at the end of last year, has increased to 524, with many new thematic products likely to attract retail investors’ interest. Samsung Asset Management recently launched the KODEX K-Metaverse Active ETF, which invests in the emerging leading sector of the metaverse. The net assets of this product grew to 323.8 billion won in just about a month (30 trading days). Shinhan Asset Management also introduced ETFs such as SOL Global Carbon Emission Allowance Futures S&P(H), which allow investors to access the relatively unfamiliar carbon emission rights market, drawing attention. Recently, the HANARO Fn Golf Theme ETF was launched, investing in the golf theme, which has become a popular sport due to COVID-19.

Geum Jeong-seop, head of the ETF Strategy Office at KB Asset Management, said, "ETF trading, which was previously only possible through securities firms’ Individual Retirement Pension (IRP) accounts, is now also available through bank pension accounts," and added, "The ETF market is expected to continue growing through the pension market."

Kim Jeong-hyun, head of the ETF Management Center at Shinhan Asset Management, said, "The significant change called ‘popularization of investment’ is creating a favorable environment for the ETF market," adding, "ETFs that meet diverse investment demands are being supplied in a timely manner, and if asset managers make greater efforts to communicate with investors in the future, the ETF market can continue to grow."

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