Kim Seonghun, Head of Hanwha Asset Management, "Taking a Different Path from Samsung and Mirae... 'Fast Trial' Strategy, Proactive Product Launch"

Company-wide Support for ETF Business
11 New ETFs Listed This Year Alone
Discovering Megatrends Like Hydrogen, Rare Earths, and Aerospace
Presenting 'Fast Trial' Strategy
Focusing on Diverse Products and Proactive Launches

Kim Sung-hoon, Head of ETF Business Division at Hanwha Asset Management. / Photo by Yoon Dong-joo doso7@

[Asia Economy Reporter Hwang Yoon-joo] Hanwha Asset Management has changed. The product that caught investors' attention in the ETF market in the first half of this year was undoubtedly 'Arirang (ARIRANG).' After CEO Han Doo-hee took office in the second half of last year and Kim Sung-hoon, head of the ETF Business Division, changed the strategy, the company underwent a complete transformation. It took only seven months. Even the industry, which considered it a year-end personnel matter, is now watching closely. We met with Kim Sung-hoon, head of the ETF Business Division, to hear about the background of Hanwha Asset Management's changes, strategies, and future plans.

- Hanwha Asset Management's ETF business has changed. Can it really change this much just by reorganizing the organization?

△ After CEO Han Doo-hee took office in July, he emphasized that the ETF business must be led. He promised company-wide support, and the ETF division was promoted to a headquarters. Subsequently, three teams were formed within the business headquarters. The word 'business' in ETF is important. The headquarters includes three functions: management, new product development, and marketing. Hanwha Asset Management has three asset management headquarters (Global Equity, Global Bonds, ETF), but the only headquarters with all three functions is the ETF headquarters. The others only manage assets. This means the ETF headquarters receives company-wide support. Among public offering products, ETF equity-type products are prioritized. Only ETFs were launched in the first half of the year, and going forward, ETFs will remain the top priority in public offering products.

- Hanwha Asset Management has so far focused on managing assets of its parent company, Hanwha Life. Why change the strategy and expand the ETF business?

△ A significant portion of the total managed assets is operated with LDI (Liability-Driven Investment) funds from its affiliate, Hanwha Life. However, we do not consider the existence of the asset management business solely for managing Hanwha Life's LDI funds. Asset management is a financial service business that provides customers with more than just money, but value. That value is helping customers execute investment strategies and achieve their desired return goals through good products. We believe the most innovative vehicle is the ETF, and we have set a business strategy to actively launch ETF products to help customers achieve their investment strategies.

- Is it meaningful to aggressively launch products in an ETF market dominated by Samsung Asset Management and Mirae Asset Global Investments?

△ At this stage, we do not aim to catch up with Samsung Asset Management or Mirae Asset Global Investments. Our strategy is 'Fast Trial.' This strategy is not about growing scale like Samsung or Mirae but about proactively offering innovative products to customers. Since the establishment of the ETF headquarters, we have created 13 new products?2 last year and 11 this year. Through proactive product handling, the image of Arirang ETFs has changed, and we are emerging as an asset manager that consistently launches good products. Furthermore, we believe sales will follow. The order should not be reversed.

Kim Sung-hoon, Head of ETF Business Division at Hanwha Asset Management. / Photo by Yoon Dong-joo doso7@

- How do you evaluate the ETF headquarters in the first half of this year?

△ We believe it has addressed sectors with long-term growth potential where investors want to invest but lack options. Hanwha Asset Management’s thematic ETFs are called 'Megatrends.' Products related to rare earths and aerospace are representative examples. K-REITs have also been evaluated as products that both individual and institutional investors can use for asset allocation. We take pride in the Hanwha Asset Management ETF Business Division’s significant contribution to the qualitative development of ETFs through 'first-ever' product launches.

- There are also suggestions that a star ETF worth 'trillions' like those of Mirae Asset Global Investments is needed. Considering pulling funds from Hanwha Life to create a large-scale ETF worth 1 trillion KRW is also worth considering.

△ The 'ARIRANG High Dividend' ETF, which was widely used by individuals and institutions as a dividend ETF, once had net assets close to 500 billion KRW. It still holds about 200 billion KRW now. Currently, through the 'Fast Trial' strategy, we are proactively launching various products. Of course, we are also seriously considering large-scale products that meet the needs of institutional investors. We are in discussions with several institutional investors.