ETF 500 Era Approaching.. "Boxpi, Capture Outflow Funds"

[Asia Economy Reporter Junho Hwang] Asset management companies are continuously launching exchange-traded funds (ETFs) to capture funds exiting the stock market, which is stuck in a box range.

According to the Korea Exchange on the 3rd, as of the 2nd, the total number of ETFs listed domestically reached 497. This is the highest number since ETFs were first introduced to the domestic stock market in 2002. The number increased by 29 from 468 at the end of last year.

In particular, at the end of last month, three companies?Samsung Asset Management, Hanwha Asset Management, and NH-Amundi Asset Management?launched a total of 8 new ETFs. With 14 new products listed last month alone, the number of domestic listed ETFs surpassed the 490 mark.

Asset managers are launching ETFs one after another to attract investors turning to indirect investment as the stock market remains confined within a box range. ETFs are funds that hold multiple stocks selected by fund managers but can be easily bought and sold through home trading systems (HTS) like stocks.

Especially, recently launched ETFs often directly meet investors' needs beyond traditional sector classifications. Representative ETFs include those holding stocks that young investors easily encounter in daily life, such as Webtoon & Drama (Samsung), K-POP & Media (NH-Amundi), K-Game (NH-Amundi), and Media (NH-Amundi).

Among ESG (Environmental, Social, Governance) factors, considering recent social interest, governance (G) has been prioritized, leading to the launch of an active ETF product (ARIRANG ESG Value Active) where the asset management company directly manages 30% of the total assets.

This strategy by asset managers has so far been evaluated as successful. Despite the stock market being stuck in a box range, the total net assets of all ETFs surpassed 60 trillion won (as of the 2nd). This was achieved in just over a month (18 trading days) since the 7th of last month.

It is expected that the number of ETFs will surpass 500 within this year. Yook Dong-hwi, head of the ETF Consulting Team at KB Asset Management, said, "Since COVID-19, the ETF market has grown in size, and participation by latecomers has increased, intensifying competition," adding, "In response to these changes, ETF asset managers, including our company, are expected to launch various ETFs."