Shift Toward Themed and Active ETFs, Rising Competition in Korean Market
Korea’s ETF market is experiencing a notable shift as capital flows out from flagship index-tracking products into thematic and actively managed ETFs. Major ETFs such as KODEX Leverage, KODEX200, and KODEX KOSDAQ150 have seen significant outflows, losing several hundreds of billions of Korean won, while funds like KoAct KOSDAQ Active, TIME KOSDAQ Active, and TIGER Semiconductor TOP10 are attracting substantial inflows amounting to over one trillion won. This trend is attributed to a combination of large-cap stock rallies and new policies aimed at revitalizing the KOSDAQ market.
In parallel, a growing number of small- and mid-sized asset managers, as well as new entrants, are challenging the dominance of industry giants Samsung Asset Management and Mirae Asset. Leveraging talent from major firms and aggressive marketing strategies, these new players are launching unique products and expanding their organizational capabilities, making the competitive landscape increasingly dynamic. The rapid market growth and evolving policies present fresh opportunities for smaller asset managers to strengthen their market position.
Meanwhile, domestic equities have surged, with individual investors’ active ETF purchases and FOMO (fear of missing out) mentality driving heightened volatility. Individuals are having a greater impact on market trends compared to foreign and institutional investors, primarily through systematic ETF trades. This has contributed to pronounced fluctuations in the market, particularly during the rallies of January and February and the global correction in early March. Going forward, strategic reassessment is needed in light of potential interest rate policy shifts and changing corporate earnings.
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