ETF Launch 'Flood'... Only China Cried

Jullieun ETF Launch
Majority Thematic ETFs
Double-Digit Decline in China-Focused ETFs

[Asia Economy Reporter Hwang Junho] As stock market volatility increases, asset management companies are rushing to launch exchange-traded funds (ETFs). These products aim to attract investors who find direct investment challenging due to high volatility. However, early performance varies, deepening investors' concerns.

According to the Korea Exchange on the 5th, a total of 18 ETFs have been launched from the beginning of this year until the 4th. This is a significant increase compared to 6 during the same period last year. The product launches by top market share asset managers with the capacity to introduce new ETFs stand out. Samsung Asset Management (41.65%) and Mirae Asset Global Investments (36.93%), competing for the number one market share, each launched four new products, while Hanwha Asset Management, which established an ETF business division last year to expand its market share, released three products.

These products reflect the popular themes in the recent stock market. Most are themed around electric vehicles, ESG (environmental, social, governance), hydrogen economy, and China. Among them, the 'hydrogen economy ETFs' showed the highest early performance. Hanwha Asset Management's ‘ARIRANG Global Hydrogen & Next-Generation Fuel Cell MV’ and ‘KBSTAR Global Hydrogen Economy Indxx’ recorded returns of 19.86% and 14.69%, respectively, over the past month. Cha Dong-ho, head of ETF operations at KB Asset Management, analyzed, "The global energy security issue has highlighted the production of power from eco-friendly energy sources such as solar and wind, and the establishment of hydrogen economy infrastructure, resulting in efforts to achieve both security and environmental goals."

On the other hand, the China STAR Market ETFs launched in January by Mirae Asset (-12.60%), Samsung (-14.18%), Shinhan Asset Management (-12.62%), and Korea Investment Management (-11.93%) have experienced decline since their launch. Kim Jeong-hyun, head of the ETF Center at Shinhan Asset Management, said, "Volatility will continue until the peak of COVID-19 cases in China is confirmed," adding, "Once confirmed, there are expectations that the government will announce aggressive stimulus measures."

Asset managers plan to continue launching new ETFs in the second quarter of this year. In Q2, ETFs employing an ‘active’ management style, where fund managers can directly respond to highly volatile markets, will be introduced. On the 8th, KB Asset Management will launch the industry's first active ETF investing in secondary battery stocks (KBSTAR Secondary Battery Active ETF). Shinhan Asset Management will release the ‘SOL Korea-style Global Semiconductor’ ETF this month. This product invests not only in the U.S. Philadelphia Semiconductor Index stocks but also simultaneously in Samsung Electronics and SK Hynix.

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