Changes in ETF Fee Policy and Advertising Spending
Kim Do-hyung, an executive at Samsung Asset Management, emphasizes the importance of adjusted net asset value (NAV) amid the controversy over ETF real cost burdens, explaining that such costs are already reflected in returns. He argues that to accurately evaluate returns, the adjusted NAV, including distributions, should be considered, and that low real cost burdens do not necessarily ensure high returns. Recently, Samsung Asset Management reduced fees but faced criticism over high cost burdens, attributing it to increased net assets and trading expenses due to dividend reinvestment.
Major asset management firms are significantly cutting their ETF fees to encourage retirement funds to enter the ETF market. Mirae Asset, Samsung, and KB Asset Management have each notably lowered their ETF fees, viewing market expansion as necessary. However, there are concerns that these fee reductions could negatively impact smaller firms, raising the possibility of decreased service quality or the shifting of costs to other firms.
Last year, asset management firms' advertising spending surpassed 55.9 billion won, marking an increase of 34.8% compared to the previous year. Mirae Asset Management leads the sector in advertising expenses, while KB Asset Management increased its advertising budget by 317.1% in a bold rebranding effort. This trend reflects intensified competition in the ETF market, whereas Korea Investment Trust Management reduced its advertising budget yet expanded its market share.
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ETF Competition Boosts Asset Management Firm Ad Spending Beyond 50 Billion Won - E-DailyLast year's advertising expenses spent by asset management firms exceeded 50 billion won. Some firms have increased their advertising budgets more than fourfold. As the exchange-traded fund (ETF) market expands, more products are being launched, and with intensified marketing competition to secure customers, an increase in advertising expenditure has been observed.
[Money+]'No Bleeding Competition' Lineup of ETF Fee Reductions - Business PlusLarge asset management companies are competitively reducing fees for Exchange Traded Funds (ETFs), raising concerns about a potential price war. The industry believes there is a need to expand the ETF market and awaken dormant investment demand, such as for retirement pensions. According to the asset management industry on the 19th, Mirae Asset Management lowered the total fees for its representative U.S. index ETFs 'TIGER US S&P500' and 'TIGER US NASDAQ 100' from the previous 0.07% to 0.0068% per annum on the 6th. Samsung Asset Management followed by reducing the total fees for 'KODEX US S&P500' and 'KODEX US NASDAQ 100' from 0.0099% per annum.
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