Choi Chang-gyu, Head of Samsung Asset ETF Division, "A Year to Protect My Assets Well"

[Asia Economy Reporter Junho Hwang] "This year is a time to protect rather than to make new investments."

On the 20th, Choi Chang-gyu, Head of ETF Consulting at Samsung Asset Management, said, "With the global tightening, including the US interest rate hikes, entering full swing, it is not the time to bet looking toward next year." Choi, who has worked as a 'star' derivatives analyst for the past 17 years, moved from NH Investment & Securities to Samsung Asset Management last year, where he oversees ETF marketing and consulting. He assessed, "A 5% interest savings account might be better," adding, "If investing in ETFs, it is more realistic to secure short-term profits through leveraged and inverse ETFs that invest in volatility, which is expected to increase in amplitude, rather than thematic ETFs."

He also forecasted that the thematic ETF craze, which has been rising since last year, will face a turning point this year. His fundamental question is, "With the tightening stance reducing funds flowing into growth stocks, is growth really possible?" He particularly viewed it as difficult for domestic thematic ETFs to deliver differentiated performance, citing the reason that there are too many similar products. For example, ETFs themed around Metaverse, Non-Fungible Tokens (NFT), entertainment, and fintech have different names but ultimately funnel investments into major domestic internet companies like Naver (NAVER), Kakao, and HYBE. Since the overall returns of these themes are similar, the product value of the themes themselves is diminished, he explained.

Choi said, "If it is a differentiated theme that no one else has created, it can overcome the current market situation," and added, "We will soon introduce thematic ETFs organized through a thematic council formed together with Samsung Active Asset Management." Samsung Asset Management is planning a product investing in the global secondary battery sector.

They also plan to widen the gap with the second-largest market share holder. Samsung Asset Management launched Korea's first ETF in 2002 and has maintained the number one market share in representative index-tracking products like KODEX200 and derivative products such as KODEX Leverage and Inverse. However, the market share, which exceeded 50% before the thematic ETF boom, has decreased to 42.40% as of the 21st. The gap with the second place has also narrowed to about 6.60 percentage points.

Choi explained, "Other asset management companies have advantages in ETF sales because they have securities firms as well as banks as affiliates," and added, "We are making multifaceted efforts to increase ETF market share, including expanding sales channels."