Pound and Hana Securities Launch Global 'Mini ETF' Allowing Fractional Share Trading

Fount, a robo-advisor specialist company, announced on the 2nd that its subsidiary Fount Investment Advisory has launched a ‘Mini ETF’ product, a fractional trading version of global ETFs, through the Fount app.

This product is designed to help more investors easily invest in global ETF products with a low minimum investment amount through fractional trading. In typical fractional trading, when an investor places an order in fractional units, the securities firm creates a whole share (1 share) to fulfill the order, so only pre-orders are possible. Therefore, it is not possible to trade at the desired price and time.

Fount’s algorithm calculates the optimal portfolio for the day before the stock market opens, and the system pre-determines the sell and buy order plans, so the negative impact from the daily order execution time and price is relatively low.

The newly launched Fount Mini ETF allows investment in ETFs listed in the U.S. with 200,000 KRW. Since the price unit of U.S.-listed ETFs is high, it is generally difficult to compose an optimal portfolio with a low investment amount. The Fount Mini ETF compensates for this drawback, meaning investors can invest in a globally diversified ETF portfolio optimized with a small amount of 200,000 KRW. Previously, the minimum investment amount for the existing Fount Global ETF was lowered once from 5 million KRW to 2 million KRW, but some investors still found it burdensome. The Mini ETF is invested using the same strategy as the global ETF. The Mini ETF is based on dollar-denominated investments, so gains and losses due to exchange rates are reflected in the performance.

The management strategy focuses on sector rotation investment centered on the U.S. Using Fount’s macroeconomic indicator analysis model (Fount Global Macro Score), it sequentially invests in promising sectors according to the economic cycle. By investing in sectors with a high potential for excess returns compared to the market in each economic cycle, it seeks alpha. Part of the portfolio is designed to achieve higher performance by investing in bonds, commodities, etc., through geopolitical issues and quantitative and qualitative analysis. Trading fees are applied the same as existing products through consultation with Hana Securities.

Kim Young-bin, CEO of Fount, said, “As interest in investment has increased across all generations after COVID-19, this product was planned with the idea of allowing anyone to experience global asset allocation without burden even with a small amount.” He added, “Fount’s discretionary algorithm actively pursues profits by incorporating promising sectors at the time, and since it invests based on the U.S. dollar, it is expected to play a role in risk hedging along with profit expectations.”