Korean Asset Managers Post Record Earnings Driven by ETF Boom; Concerns Over Market Polarization
Korean Asset Managers Post Record Earnings Driven by ETF Boom; Concerns Over Market Polarization
South Korean asset management companies posted record earnings last year, fueled by a surge in ETF investment inflows and a buoyant stock market. Net profits soared by 66.5% to 3.01 trillion won, with operating profits up 81.1%, and total assets under management rising by 17% to 1,937 trillion won. The value of ETF assets managed increased sharply by 71.1%, underscoring a growing industry reliance on ETFs over traditional mutual funds. However, this rapid growth is exposing structural challenges within the market. Heavy dependence on ETFs is intensifying the concentration of profits and assets among large asset managers. While major firms have achieved substantial gains, approximately 36.7% of small and mid-sized private asset managers reported losses, highlighting deepening polarization in the industry. The Financial Supervisory Service has voiced concerns that this trend could undermine the sector’s long-term stability, pledging continuous oversight and policy reforms to promote balanced industry growth.
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