'IFC Mall Sale Yield Indirect Benefit for Me Too'... Hanwha Asset Management Lists US Alternative Investment ETF (Comprehensive)

Investment in US Companies like Blackstone, KKR, Brookfield Management
Over 75% of Revenue or Assets in Alternative Investments
Stable Investment Returns Possible Amid Volatile Stock Market
Brookfield, Mirae Asset Management Selected as Preferred Bidder for IFC Sale
Indirect Benefits if Companies' Investment Returns Increase

[Asia Economy Reporter Hwang Yoon-joo] Hanwha Asset Management is launching the world's first exchange-traded fund (ETF) that invests in large U.S. companies composed of alternative assets. It includes globally renowned asset management firms and private equity (PE) companies familiar to us, such as Blackstone and Kohlberg Kravis Roberts (KKR). The explanation is that diversifying portfolios through alternative asset investments during a period of persistent inflation and growing concerns about economic slowdown can yield more stable returns than traditional assets.

◆ Investing in Alternative Investment Specialists... Aiming for Stable Returns in Volatile Markets = On the 11th, Hanwha Asset Management listed the 'ARIRANG US Alternative Investment Top10 MV' ETF on the Korea Exchange. This ETF invests in 10 large U.S.-listed companies whose sales or assets under management consist of at least 75% alternative assets.

Looking at the components, it includes many global alternative investment specialists listed in the U.S., such as ▲Blackstone ▲KKR ▲The Carlyle Group ▲Apollo Global Management ▲Brookfield Asset Management. The underlying index is the MVIS (MV Index Solutions) BlueStar Top 10 US Listed Alternative Asset Managers Index.

This ETF, 'ARIRANG US Alternative Investment Top10 MV,' is the first to invest broadly in alternative assets including private equity, venture capital (VC), and business development companies (BDC).

Alternative investment refers to investing in assets other than traditional investment assets such as stocks and bonds, including PE (Private Equity), real estate, infrastructure, commodities, and other tangible assets.

Among the ETF's holdings, the companies with the largest weights are Apollo (23.94%) and Brookfield Asset Management (13.82%). Brookfield Asset Management, a global real estate investment manager, acquired the IFC Mall located in Yeouido, Seoul, in 2016 for 2.55 trillion KRW and recently put it up for sale. Currently, Mirae Asset Global Investments has been selected as the preferred bidder, and a main contract worth approximately 4.5 trillion KRW is expected to be signed soon. If investment returns are reflected in performance and stock prices, investors in the 'ARIRANG US Alternative Investment Top10 MV ETF' can also enjoy the ripple benefits.

Also, due to the nature of alternative investments requiring relatively large amounts of capital for illiquid assets, the market has mainly been formed by high-net-worth individuals and institutional investors. Kim Seong-hoon, head of the ETF Business Division at Hanwha Asset Management, explained, "For individual investors to engage in alternative investments, investing in alternative asset managers through ETFs listed on the stock market is the most effective strategy," adding, "Launching the ETF now, when the stock market has undergone a correction, could result in relatively higher investment returns."

◆Hanwha Asset Management Continues to Launch World-First ETFs = Hanwha Asset Management signed a memorandum of understanding (MOU) with MVIS in May last year, securing exclusive rights to supply MVIS's thematic indices for the next five years.

This ETF is the third product created through collaboration between Hanwha Asset Management and MVIS. Previously, they launched 'ARIRANG Global Rare Earth Strategic Resource Companies MV' and 'ARIRANG Global Hydrogen & Next Generation Fuel Cell MV.'

Hanwha Asset Management's recent consecutive launches of 'world-first' or 'domestic-first' ETF products are thanks to the elevation of its ETF organization to the 'ETF Business Division' last year, actively pursuing differentiated product development from traditional asset management.

Hanwha Asset Management also launched ETFs such as 'ARIRANG Fn K-REITs,' which invests only in domestic listed REITs, and 'ARIRANG US S&P500 (UH).' Most S&P500 ETFs are currency-hedged products, but this one is unhedged, so it is expected to benefit additionally from currency gains when the dollar strengthens. Furthermore, in line with the implementation of default options for retirement pensions in the second half of the year, the 'ARIRANG TDF Active 2030/2040/2050' ETFs will be launched in July.

Kim, the division head, explained, "It was not intended to be the world's first, but by proactively launching ETFs to expand investors' investment alternatives, we ended up introducing the most differentiated products in the industry first."