"S&P500 Components Invested with Equal Weight"
"First Listing in Asian Country... Providing New Options for Investors"
Mirae Asset Global Investments is launching the first 'U.S. S&P 500 Equal Weight Exchange-Traded Fund (ETF)' in Asia.
Kim Nam-gi, Head of ETF Operations at Mirae Asset Global Investments (Vice President), delivering a welcome speech at the TIGER ETF press conference held on the 19th at Euljiro Mirae Asset Center One. Photo by Mirae Asset Global Investments
On the 19th, Mirae Asset Global Investments held a press briefing at the Euljiro Mirae Asset Center One and announced that the 'TIGER U.S. S&P 500 Equal Weight ETF' will be listed on the Korea Exchange on the 23rd of this month.
The 'TIGER U.S. S&P 500 Equal Weight ETF' is an ETF that invests equally in the constituent stocks of the S&P 500 index, which represents U.S. investments. In other words, it invests 0.2% equally in each of the 500 stocks. This method reflects the performance of mid- and small-cap stocks more significantly compared to large-cap stocks. This product has been prepared by Mirae Asset Global Investments since last year. Namho Kim, Head of the FICC ETF Management Division, explained, "As the phenomenon of concentration in a few stocks continued, we started preparing this ETF while considering what the opposite strategy could be," adding, "This product has the advantage of maximizing diversification effects."
Recently, the S&P 500 has been led by large tech stocks known as the 'Magnificent 7 (M7)'?Microsoft, Apple, Nvidia, Google, etc.?which has intensified the concentration in a few stocks. This has raised concerns about increased volatility. Mirae Asset Global Investments expects that the 'TIGER U.S. S&P 500 Equal Weight ETF' will meet the demand for diversified investment in representative U.S. stocks. Kyungjun Lee, Head of the Strategic ETF Management Division, stated, "The market's direction is unpredictable," and added, "The current concentration in a few stocks like the M7 is an unusual situation, so providing investors with a new option is meaningful."
Namho Kim, Head of FICC ETF Operations Division (left), and Kyungjun Lee, Head of Strategic ETF Operations Division, are seen answering questions about the 'TIGER US S&P 500 Equal Weight ETF' at a press briefing held on the 19th at Euljiro Mirae Asset Center One. Photo by Hyunseok Yoo
Additionally, the 'TIGER U.S. S&P 500 Equal Weight ETF' employs a quarterly rebalancing strategy that reduces the weight of stocks that have risen (realizing gains) and increases the weight of stocks that have fallen (buying at lower prices), which can lead to superior long-term performance. An analysis of the long-term performance trends of the 'S&P 500 Equal Weight Index' and the 'S&P 500 Index' since 1990 shows that the S&P 500 Equal Weight Index has recorded better performance due to the rebalancing effect. Head Namho Kim emphasized, "Looking at periods of interest rate cuts, mid- and small-cap stocks tend to outperform large-cap stocks," and added, "Since the equal weight ETF rebalances quarterly, it is expected to benefit from the buy-low, sell-high effect."
Mirae Asset Global Investments expects the TIGER U.S. S&P 500 Equal Weight ETF to be the only product of its kind in Korea. This is the first time that an S&P 500 equal weight investment ETF listed in the U.S., Europe, Canada, or Australia is being listed in an Asian country. Especially since the index provider, S&P Dow Jones Indices, grants licenses from a strict and conservative perspective, Mirae Asset Global Investments anticipates that it will be difficult for other asset managers to launch similar products easily.
Namgi Kim, Vice President and Head of the ETF Management Division at Mirae Asset Global Investments, said, "We are very pleased to be able to introduce this product, which is currently listed only in six countries including the U.S., the U.K., Canada, and Australia, to the domestic market," and explained, "This means that a new solution for investing in a representative U.S. index has emerged for domestic investors." He added, "Although exclusive rights are not explicitly stated, based on examples from other countries, it is highly likely that we will hold exclusive rights."
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