Korean ETF Market Surges on Semiconductors and Thematic Index Innovation

Mr. Jae-kyu Bae, CEO of Korea Investment Management, highlighted the ETF’s role as a key asset allocation tool and stressed rapid expansion of the domestic ETF market. He noted that Korea’s ETF assets under management recently surpassed KRW 400 trillion, suggesting significant growth potential compared to the US market. The main drivers behind this surge are the structural advantages of ETF products and ongoing 'money move' trends; however, he cautioned against the excessive use of leveraged short-term products. Bae recommended embracing ETFs for long-term strategies in the AI era, citing investments in semiconductor and big tech ETFs.
According to FNGuide, ETFs based on its indices now exceed KRW 60 trillion in assets—doubling since the start of the year and outpacing market-wide growth. Strong performance in the semiconductor industry, international tailwinds in the defense and shipbuilding sectors, and rising demand for high-dividend stocks have been key to this growth. Robust demand for HBM and AI server-related semiconductors has further funneled capital into related ETFs. FNGuide is also accelerating the development of global thematic indices, signaling the launch of more innovative ETF products in the future.
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