[Interview] "Diversify Investments with ETFs and Create a Second Income"

First Monthly Dividend ETF Debut Kim Jeong-hyun, Head of ETF Center at Shinhan Asset Management
"Should Be Used as a Stable Asset Allocation Tool"

[Asia Economy Reporter Park So-yeon] Exchange-traded funds (ETFs) that pay dividends monthly like a salary are gaining popularity among investors. Since Shinhan Asset Management first launched such a product in late June last year, steady investment has flowed into major monthly dividend ETFs, bringing the domestic net asset size close to 700 billion KRW. This is a case that drew attention by identifying hidden customer demands and introducing a new type of product to the industry. We met Kim Jeong-hyun, head of the ETF Management Center at Shinhan Asset Management, who planned this product for the first time in Korea.

Kim Jeong-hyun opened the conversation by saying, "There needs to be an improvement in the perception of ETFs in the domestic capital market." In Korea, ETFs started with a bullish market and took on an aggressive character similar to stock investing. As a result, investors mistakenly perceive them as highly volatile products rather than stable asset allocation tools.

Jung Hyun Kim, Head of ETF Management Center at Shinhan Asset Management.

He said, "ETFs are the optimal means for stable asset allocation, but the first step was taken incorrectly in Korea." Kim believes that domestic investors should shift their direction toward long-term investment and portfolio diversification through pension asset investment with ETFs, monthly dividend products, and bond-type ETFs.

To improve this perception, he is focusing on investor education and communication. Kim stated, "Asset management industry professionals, including myself, need to actively communicate with investors." He explained, "Using SOL ETFs as an example, aggressive investors can hold the S&P 500, while also holding dividend ETFs and bond ETFs to diversify their portfolio by asset class."

He views positively the increasing number of investors seeking stable income-type investments amid recent unstable financial market conditions. Kim Jeong-hyun explained, "Monthly dividend ETFs are classified as income-type assets, and in the past, such products gained attention in Japan amid rapid aging." There was a craze for monthly payment products that act as a 'second salary' by investing a lump sum and receiving monthly payments. Recently, these products have also been recognized in the domestic market as risk-diversifying and defensive products. Kim added, "There is a strong demand to maintain a more stable cash flow in uncertain financial markets." The core assets are maintained while distributing profits through continuous dividends, which also reduces investment risk.

Kim said, "Reflecting customer demands, we plan to build a diverse lineup not only of monthly dividend products but also bond-type products," and confidently stated, "We will enable a perfect portfolio composition with only Shinhan ETFs when investing for pensions." He also set a goal to surpass 1 trillion KRW in ETF net assets. He added, "My seniors said that asset management companies are ultimately businesses based on trust, and now I understand that. I will do my best to form a loyal fan base unique to stable and reliable Shinhan ETFs."

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