Intensified Competition and Shifts in the Domestic ETF Market
Competition between Samsung Asset Management and Mirae Asset Global Investments is intensifying in the domestic ETF market. Mirae Asset is focusing on gaining market share by emphasizing lower fees, while Samsung emphasizes high returns in its strategy. In conjunction, major asset management firms are engaging in marketing competitive activities by lowering ETF fees, leading to a significant rise in advertising costs and a subsequent drop in operating profits.
The fierce competition over market share is causing asset management firms to face declining profitability, posing a threat to industry sustainability. The sector is shifting towards a landscape dominated by large management firms, and there is growing criticism over large firms mimicking innovative products of smaller companies.
Moreover, changes in the foreign tax credit method have impacted the investment strategies of individual investors in ETFs. As a response to increased tax burdens on foreign dividends, investors are shifting their assets to covered call ETFs. Notably, this year, individual investors have been selling U.S. dividend-related ETFs and purchasing covered call products.
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