Ease of Investment and Asset Allocation
Thematic ETFs Become a Global Trend
Acquisition of Global X in 2018...
Worldwide ETF Assets Under Management Reach KRW 212 Trillion
Next Step: AI and the Launch of Innovative 'Killer Products'
Last year, as the global exchange-traded fund (ETF) market's assets under management grew to $15 trillion, Mirae Asset's growth, centered around the thematic ETF operator 'Global X,' has been remarkable.
According to global research firm ETFGI, as of the end of December last year, the global ETF net assets totaled $14.846 trillion (KRW 2,192.8 trillion). This represents an increase of $3.21 trillion compared to the end of 2023. Over the past decade, the average annual growth rate has steadily been 17.1%.
Rapid Growth in the Global ETF Market through Aggressive M&A
Park Hyun-joo, Chairman of Mirae Asset Group Global Strategy Office (GSO), who anticipated the global growth speed of the ETF market, began with Canada's 'Horizons ETFs (now Global X Canada)' in 2011, followed by the U.S. 'Global X' in 2018, and Australia's 'ETF Securities (now Global X Australia)' in 2022, pursuing mergers and acquisitions (M&A) to grow Mirae Asset Global Investments into a global ETF operator.
As of the end of January, Mirae Asset Global Investments operates 632 ETFs across 13 regions worldwide, including Korea, the U.S., Canada, Australia, and Japan. The total net assets amount to KRW 212 trillion, ranking 12th among global ETF operators. Mirae Asset's global ETF net assets, which surpassed KRW 100 trillion in 2021, have exceeded KRW 200 trillion in just over three years.
Global X US surpassed $50 billion in total assets under management last year. At the time of acquisition in 2018, assets under management were $10 billion, growing fivefold in just over six years. Founded in 2008, Global X has earned a reputation as an 'innovative ETF leader' by offering differentiated products such as thematic and income-oriented ETFs from its early days.
Chairman Park Hyun-joo said in 2018 on the company's YouTube channel, "The acquisition of Global X was based on observing the global trend of thematic ETFs."
Since acquiring Global X, Mirae Asset has steadily increased the scale of thematic products. The net assets of thematic ETFs, which were about $5.4 billion in July 2018 at the time of acquisition, grew to $33.4 billion by the end of last year. Last year, PAVE US (Global X US Infrastructure Development ETF) and AIQ US (Global X Artificial Intelligence & Technology) attracted net inflows of $1.85 billion and $1.33 billion respectively, gaining popularity.
Thematic ETFs provide investors with an easy way to access specific themes. Thematic ETFs based on innovative industries and technology trends such as AI reflect investors' expectations for future growth potential. They offer an opportunity to secure appropriate asset allocation with a single trade by selecting a single fund according to the investor's risk profile.
Chris Brueckner, CEO of Australian robo-advisor specialist Stockspot, appeared on Mirae Asset Global Investments' YouTube channel last November and said, "The recent emergence of asset allocation ETFs is providing new opportunities." He added, "Asset allocation ETFs offer investors a way to effectively combine specific asset classes and thematic ETFs," and "They are a means to implement customized investment strategies tailored to risk tolerance and investment goals."
For stock investors in export-driven countries like Korea, the importance of thematic products from an asset allocation perspective is expected to become more prominent. Optimized portfolios can be created by diversifying through overseas and thematic ETF products to maximize long-term returns, addressing issues such as market structures centered on specific industries and sensitivities to global macroeconomic factors like exchange rates.
Leveraging its overseas network, Mirae Asset also supplies innovative thematic products in the domestic market through the TIGER ETF brand. In collaboration with the U.S. Nasdaq Stock Market, it developed a new global semiconductor index (ASOX). Through this, it launched the world's first 'TIGER US Philadelphia AI Semiconductor Nasdaq ETF' that tracks the ASOX index.
Mirae Asset's 'AI & Bitcoin' ETFs... Products Leading Market Changes
Mirae Asset's next step is heading toward AI. Mirae Asset plans to attempt new changes by integrating AI technology with accumulated experience in ETF development and its overseas network. In 2023, it acquired Australian robo-advisor specialist 'Stockspot.' Last year, it established 'Wealthspot,' an AI-specialized company in the U.S. Wealthspot is expected to coordinate AI financial strategies across overseas subsidiaries and contribute to providing innovative products.
Chairman Park Hyun-joo recently emphasized 'killer products' that can be differentiated products to change the market at the 'ETF Rally,' a meeting sharing the group's ETF business. In the first half of this year, the group's first AI-based product, 'Global X Investment Grade Corporate Bond Active,' developed in collaboration between U.S. Global X and AI subsidiary Wealthspot, will be launched in the U.S. market. Development of Bitcoin-related products is also underway. It is expected to be a covered call (underlying asset purchase + call option sale) type product that adds stability to Bitcoin's growth potential.
A Mirae Asset Global Investments official said, "Mirae Asset is continuously pursuing innovation to strengthen competitiveness in the global market," adding, "Through this, we plan to dedicate company-wide capabilities to supply differentiated products and enhance investors' long-term returns."
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