First Listing of 4 Korea-China Joint Index ETFs... Investment in Core Industries 'Semiconductors and Electric Vehicles'

[Asia Economy Reporter Son Sunhee] An exchange-traded fund (ETF) that allows simultaneous investment in leading companies in key industries such as semiconductors and electric vehicles in both Korea and China will be newly listed on the 22nd. This is a follow-up achievement following the signing of a memorandum of understanding (MOU) for mutual cooperation in the capital markets between the two countries on the occasion of the 30th anniversary of Korea-China diplomatic relations this year.

On the 21st, the Korea Exchange announced that four types of ETFs based on the 'KRX CSI Korea-China Joint Index' are scheduled to be listed on the KOSPI market on the 22nd. The two exchanges signed an 'MOU for mutual cooperation including capital market linkage projects' on May 11 last year. Subsequently, in December, they developed three Korea-China joint indices (KRX CSI Korea-China Leading Companies 50, KRX CSI Korea-China Semiconductor, KRX CSI Korea-China Electric Vehicle) that allow simultaneous investment in representative companies and new growth industries of both countries.

The four ETFs to be listed this time are based on thematic indices such as semiconductors and electric vehicles, and will be simultaneously listed on both exchanges. They attract investors' attention as the first Korea-China linked products that enable simultaneous investment in companies representing the core industries of both countries. The asset management companies are Samsung Asset Management and Mirae Asset Global Investments. The exchange stated, "It will serve as a means to meet overseas investment demand while diversifying risks related to specific countries or industries," and added, "By focusing investment on industries with expected long-term growth potential, it is expected to expand product diversity in pension investments such as retirement pensions."

However, it was noted that discrepancies between index performance and management performance may occur due to management fees and changes in constituent stocks. It was also cautioned that since there is no separate currency hedging, there is a possibility of exposure to exchange rate fluctuation risks in the future.

On the 22nd, Son Byungdoo, Chairman of the Korea Exchange, delivered a video congratulatory message at the listing ceremonies held separately at the two exchanges, stating, "The listing of ETFs based on the joint index will further strengthen the partnership between the Korea Exchange and the Shanghai Stock Exchange, and I hope it will be an opportunity for the two countries, celebrating the 30th anniversary of Korea-China diplomatic relations, to grow together in the global capital market."

Chu Yong, Chairman of the Shanghai Stock Exchange, also conveyed in a video congratulatory message, "The newly listed semiconductor ETF and electric vehicle ETF reflect the global status of Korea and China in these two industries and the investment demand of investors for these products," adding, "They will facilitate global investors' investments in the Korean and Chinese capital markets."

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