20-Year History ETF Net Assets Touch 80 Trillion KRW Mark

First ETF Market Opened in 2002... Steadily Growing Despite Stock Market Slump
Average Return This Year -17%... Variety Expands with Bond Types and More

[Asia Economy Reporter Son Sunhee] Although the stock market was generally sluggish this year, the net asset value of Exchange-Traded Funds (ETFs) steadily increased, surpassing 80 trillion KRW. However, due to rising interest rates and concerns over economic uncertainty, the average return rate remained at minus (-) 17%.

According to the Korea Exchange on the 26th, as of the 23rd, the total net asset value of the ETF market was recorded at 79.0509 trillion KRW. Since the ETF market was first established in 2002, funds have steadily flowed in over the past 20 years, and on the 24th of last month, the net asset value exceeded 80 trillion KRW for the first time. Earlier this month, it even reached a record high of 82.7 trillion KRW. While the global ETF net asset size decreased by 7.7% compared to last year, the domestic ETF market grew by 6.9%.

The number of listed ETF items reached 666, an increase of 133 from the end of last year (533 items), marking the highest number ever. Among these, the item with the largest net asset value was 'KODEX 200' at approximately 5.2 trillion KRW (6.5% share). Following that, due to the high interest rate trend, the 'TIGER Negotiable Certificate of Deposit (CD) Interest Rate Investment KIS (Synthetic)' item had a net asset value of about 3.3 trillion KRW (4.2% share).

A Korea Exchange official explained, "The establishment of the ETF listing team and the expansion of new listing review personnel at the beginning of this year enabled swift and efficient reviews, which led to the increase in the number of newly listed items." He added, "With the first listings of bond-type ETFs with fixed terms and new hybrid ETFs, product diversity was enhanced, meeting the demand of institutional and pension investors."

However, due to the overall sluggish trading in the stock market this year, the average daily trading value in the ETF market was only 2.8 trillion KRW, a 4.5% decrease from last year's 2.9 trillion KRW.

The average ETF return rate this year was also limited to -17.02%. The average return rate of domestic equity ETFs recorded -20.69%, showing a weak performance. However, it was better than the KOSPI's (-22.30%), according to the Korea Exchange. The item with the highest cumulative return rate this year was 'KODEX US S&P Energy (Synthetic)', which recorded a 62.66% return.

The total index value of Exchange-Traded Notes (ETNs) this year reached the 11 trillion KRW level, marking a record high. The Korea Exchange explained that the growth rate surpassed both the total ETF assets and the KOSPI market capitalization growth rate.

The average daily trading value of the ETN market this year was 151.3 billion KRW, 3.4 times higher than last year. Due to the impact of the Russia-Ukraine war, volatility in energy prices increased, leading to a significant rise in trading volume centered on crude oil and natural gas products.

However, the overall ETN market return rate turned negative at -7.2%. It appears to have been affected by the global economic slowdown and asset market downturn caused by interest rate hikes. A Korea Exchange official analyzed, "In eight years since the market's establishment, the number of listed items increased from 10 (as of the end of 2014) to 367, and the total index value expanded 21.1 times during the same period." He added, "This is the result of growth-oriented market policies, including continuous expansion of product lineups and proactive responses to market demand."

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