Launch of Korea’s First Active ETFs Stimulates KOSDAQ Market
The debut of Korea's first KOSDAQ active exchange-traded funds (ETFs) led by Samsung Active Asset Management and Timefolio Asset Management on the 10th is poised to inject vitality into the KOSDAQ market. These active ETFs are expected to offer advantages in stock selection compared to traditional passive ETFs. Amidst the current trend of foreign and institutional investors reallocating funds from KOSPI to KOSDAQ, this development is garnering substantial interest from the investing community.
Different asset management firms are adopting varied strategies. Timefolio Asset Management aims to reduce portfolio volatility for stable returns, whereas Samsung Active Asset Management focuses on uncovering undervalued stocks. These strategies are anticipated to concentrate on growth industries like biotechnology, semiconductors, and robotics, thus bolstering growth momentum. Hanwha Asset Management is also preparing to launch its KOSDAQ150 active ETF soon, signaling increased competition within the sector.
Separately, existing KOSPI active ETFs have recently underperformed during volatile market conditions. This can be attributed to the current market scenario where a large-cap stock-focused environment has limited the outperformance potential of active ETFs. Conversely, with growing expectations around the KOSDAQ market, there is an increasing interest in KOSDAQ active ETFs. This phenomenon suggests a potential structural shift in the domestic ETF market landscape.
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