ETF=TIGER?.. 5%p Difference 'Wall' Broken

Industry Leader Samsung Asset Management's ETF Market Share Gap
Narrowed to Within 5%p of Mirae Asset Management
Possibility of Ranking Change Within the Year Draws Industry Attention

[Asia Economy Reporter Hwang Junho] "ETF=TIGER."

The long-standing formula in the Exchange-Traded Fund (ETF) market is likely to be broken. Samsung Asset Management, which first launched ETFs in Korea and enjoyed a market preemption effect for the past 20 years, and Mirae Asset Global Investments, which rose amid last year's theme ETF boom, have narrowed their ETF market share gap to within 5 percentage points, putting the formula ‘ETF=KODEX’ at risk of collapse.

The '5%P Barrier' Has Been Broken

According to the Korea Financial Investment Association on the 21st, as of the 17th, the market share gap between Samsung, the No.1 ETF market player by net assets under management (AUM) with 41.54%, and Mirae Asset, ranked second with 36.67%, was recorded at 4.86 percentage points. This is the first time since the ETF market opened that the market share gap between the first and second place firms has narrowed to within 5 percentage points.

The narrowing of the gap between the two companies is the result of Samsung's ‘sluggishness’ and Mirae Asset's ‘advancement.’ The total net assets of Korea's ETF market have decreased due to increased volatility in domestic and international stock markets. The market shrank from 73 trillion KRW at the end of last year to 71 trillion KRW as of now. Most of this contraction was Samsung's share. During the same period, Samsung's net assets decreased by 1.8141 trillion KRW. Net assets refer to the total scale of assets currently managed by the asset manager, calculated by adding the amount of ETF subscriptions (similar to actual purchase amounts) and the ETF's gains or losses. Samsung's net assets fell from 31.4147 trillion KRW at the end of last year to below 30 trillion KRW this month. Recently, net assets have shrunk to about 29.6006 trillion KRW. Accordingly, its market share also declined continuously from 42.47% at the end of last year to 41.54%.

On the other hand, Mirae Asset has maintained its position, holding net assets in the 26 trillion KRW range since the end of last year. The third and fourth largest asset managers also increased their market shares. KB Asset Management expanded from 7.89% to 7.98%, and Korea Investment Management increased from 4.62% to 4.83%.

By asset type, in the largest equity ETF segment (where 60% of assets are invested in stocks), a reversal between the two companies is observed. At the end of last year, Samsung and Mirae Asset managed assets worth 18 trillion KRW and 17 trillion KRW respectively, but currently Mirae Asset leads with 16.4656 trillion KRW compared to Samsung's 16.2289 trillion KRW.

TIGER Expands Its Base

On the 17th, a dealer is watching news about the 0.25%p increase in the US Federal Reserve's benchmark interest rate at the Hana Bank dealing room in Euljiro, Seoul. Photo by Moon Honam munonam@

Looking at individual ETFs, Samsung and Mirae Asset each manage five ETFs among the top 10 ETFs. By net assets, Samsung and Mirae Asset manage 12.1368 trillion KRW and 9.9822 trillion KRW respectively.

However, benefiting from its domestic market preemption effect, Samsung has a high proportion of domestic ETFs such as KODEX 200 (4.9785 trillion KRW as of the 18th, according to FnGuide). In contrast, Mirae Asset has shown strength in overseas ETFs, which have gained great popularity among individual investors as the domestic stock market declined recently. Mirae Asset manages all five mega ETFs with over 1 trillion KRW in overseas ETFs, including TIGER China Electric Vehicle (3.1547 trillion KRW).

An industry insider said, "Since TIGER also has a high net asset proportion in overseas index ETFs, it is only a matter of time before TIGER's base expands further." Kwon Oh-sung, head of ETF Marketing at Mirae Asset Global Investments, said, "The key to growth was proactively launching theme ETFs to target the market," adding, "Our future goal is to increase investor choices by offering stable products that can be used in pension accounts."