Trends and Challenges in the ETF Market
The Korea Exchange plans to launch an ETF that tracks the Korea Value-Up Index on November 4, with plans for future active ETFs. However, market reaction to the value-up index has been lukewarm, even as the ETF market continues to grow. Over the past six years, major asset managers have seen an increase in ETF assets under management, but there is a tendency for trading to focus on specific stocks and some ETFs perform poorly. The number of delisted ETFs has risen, and there is a threat of further delistings if designated management stocks do not improve.
The recent financial market is experiencing high volatility due to uncertainties around interest rate cuts and various geopolitical risks. U.S.-related ETFs are seeing strong net buying, whereas China-related ETFs have displayed weaknesses. The geopolitical risks in the Middle East have caused gold prices to rise, boosting the performance of gold-related ETFs. Meanwhile, China's large-scale economic stimulus announcement has led to a surge in China-related ETFs. Conversely, India is gaining attention as a new investment destination, with Korea Investment Trust Management offering an ETF that caters to this interest.
During the National Assembly's inspection, the adoption of witnesses related to the ETF favoritism allegations was canceled. The financial industry predominantly believes that the basis for these allegations is weak. The supervisory authorities stated that they have not found decisive evidence and are conducting inspections on large asset management companies to confirm potential violations of fair trade law. It is interpreted that no issues exist if financial transactions occur at a fair market price. Moreover, favoritism towards affiliate ETFs lacks substantial evidence; investment performance and individual investment decisions are considered significant factors.
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대한금융신문2024 10月 08
'ETF Favoritism' Avoids Parliamentary Audit... 'Lack of Evidence' - Korea Financial TimesThe adoption of witnesses for the parliamentary audit regarding 'favoritism towards ETFs' was unsuccessful. In the market, it is believed that the claims regarding each financial company favoring its affiliate's ETFs were unfounded and these suspicions have spread. As of the 8th, according to the National Assembly, CEOs of asset management and securities companies were not included among the witnesses for the parliamentary audit of the political affairs committee. There is little chance of additional witnesses being adopted. A representative from Congressman Kang Min-guk's office of the Democratic Party of Korea stated, 'We are continuously monitoring the issue of ETF favoritism,' but also noted, 'It has not been decided whether additional issues will be raised at the parliamentary audit.' In July, Congressman Kang conducted a financial audit during the political affairs committee.
[How Money] What is the Recent Trend in the ETF Market? - SBS BizInvestment Techniques Show 'How Money' - Kim Seung-hyun, Head of ETF Consulting, Korea Investment & Securities. The uncertainty among the market and investors was so high over the potential rate cut at the September FOMC that it was thought the market would stabilize once a rate cut was confirmed, but it did not. Instead, more issues and variables have emerged. In a market too volatile to predict, ET is gaining attention along with these issues…
[The SIGNAL] Only 67 ETFs with assets under 5 billion won... Will the value-up index ETF really take off? - Hans Economy[Hans Economy = Reporter Park Jong-hoon] The Korea Exchange is busily working to promote the 'hit' of the Korea value-up index. The exchange is expediting its review process as it prepares to launch a passive ETF tracking the value-up index on November 4. It also plans to follow up with the launch of active ETFs that allow more freedom in stock composition. However, the tepid public reception of the value-up index itself is a key issue. There are ongoing debates about the individual stocks included in the index and questions regarding the differentiation from existing major indices. In terms of quantitative size, the ETF market continues to grow recently. As of October 7, there are 26 asset management companies