Challenges and Growth in the 2023 ETF Market: Delisting Surge and Need for Qualitative Enhancement
In 2023, the number of delisted Exchange-Traded Funds (ETFs) has surged more than double from the previous year, totaling 35. This increase is attributed to low trading volumes, inadequate management, and an influx of similar products. According to data from the Korea Exchange, 67 ETFs, representing 7.5% of the total, have assets under management below 5 billion KRW, and 5 ETFs have been designated as management items.
The total asset size of the ETF market surpassed 150 trillion KRW last year and has crossed 160 trillion KRW this year, reflecting rapid growth. However, despite this rapid growth, issues like the 'zombie ETF' problem highlight the ongoing concerns about quality and substance. The total number of ETFs listed now amounts to 893, surpassing the number of listed companies.
With the increase in actively managed ETFs and the number of products under management, each asset management company faces growing challenges in management, notably Samsung Asset Management, which oversees 197 ETFs, the most in the market. Experts argue that strengthening the listing examination criteria is necessary for qualitative growth in the ETF market, a stance echoed by Kim Hyun-jung, a member of the Democratic Party of Korea.
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