Korean ETF Market Sees Surge in '1-Trillion-Won Club' and Growing Dominance by Major Firms
This year, South Korea's ETF (Exchange Traded Fund) market saw a remarkable surge, with the number of ETFs surpassing 1 trillion won in market capitalization increasing by about 40%, now totaling over 90. The overall market capitalization of ETFs expanded by 59.2%, solidifying ETFs as a core investment tool for local investors. There is a strong inflow of capital into ETFs tracking equities, semiconductors, nuclear power, and other themed investments, driven by the advantages of diversification, trading convenience, and tax efficiency.
However, the fruits of this growth are being consolidated among a handful of major asset management firms, notably Samsung Asset Management and Mirae Asset Global Investments. Together, these two command over 80% of the ETF market's capital, with their flagship brands—KODEX and TIGER—leading the charge. KODEX 200 has become the largest single ETF with assets surpassing 21 trillion won. Concerns have been raised that the aggressive marketing and low-fee policies of these dominant players could undermine competition, potentially weakening smaller asset managers. Prolonged concentration may introduce risks for the healthy development of the overall ETF industry.
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