Outstanding Market Defense Due to Low Actual Costs and Large Asset Size
Despite the recent correction in the U.S. stock market, the number of individual investors purchasing TIGER U.S. benchmark index ETFs is increasing.
Mirae Asset Global Investments announced on the 6th that the ‘TIGER U.S. S&P500 ETF’ ranked first in net individual purchases among domestically listed ETFs this year. The TIGER U.S. Nasdaq 100 ETF also attracted the highest net individual inflows compared to similar funds.
According to the Korea Exchange, the net individual purchase amount of the TIGER U.S. S&P500 ETF from the beginning of this year until last month was approximately KRW 584 billion. The TIGER U.S. Nasdaq 100 ETF also saw about KRW 261.8 billion in net individual purchases. This is the largest inflow amount among Nasdaq 100 tracking ETFs listed domestically.
TIGER ETFs are currently the largest U.S. benchmark index investment ETFs in Asia. As of the 5th, the net assets of the TIGER U.S. S&P500 ETF were approximately KRW 7.9 trillion, and the TIGER U.S. Nasdaq 100 ETF recorded about KRW 4.6 trillion. These are the largest among S&P500 and Nasdaq 100 index tracking ETFs listed in Asia, respectively.
The high preference of individual investors combined with low actual costs created a synergy effect, resulting in the two TIGER U.S. benchmark index ETFs recording the highest returns among similar funds last month. In February, the domestic S&P500 and Nasdaq 100 index tracking currency-hedged ETFs all aligned under the ‘Price Return’ standard, enabling direct performance comparisons among similar funds.
During February, the U.S. stock market fluctuated significantly due to policy uncertainties surrounding U.S. President Donald Trump. The S&P500 and Nasdaq 100 indices recorded negative returns.
During this period, the returns were -2.647% for the TIGER U.S. S&P500 ETF and -3.697% for the TIGER U.S. Nasdaq 100 ETF. These declines were relatively smaller compared to other domestically listed S&P500 and Nasdaq 100 tracking ETFs. It is interpreted that the low actual cost burden and large asset size of the TIGER U.S. benchmark index ETFs helped reduce the extent of return declines amid market adjustments.
Since the 6th of last month, Mirae Asset Global Investments lowered the total expense ratio of the two TIGER U.S. benchmark index ETFs from 0.07% per annum to 0.0068%. Not only the reduction in total expenses but also minimizing investor cost burdens proved effective. According to the Korea Financial Investment Association, as of the end of January, the TER (total expense ratio plus other costs) of the ‘TIGER U.S. S&P500 ETF’ was 0.0868%. Including trading and brokerage fees (0.0519%), the actual cost burden rate borne by investors is 0.1387%, which is the lowest level among U.S. S&P500 ETFs listed domestically.
Kim Nam-gi, head of the ETF management division at Mirae Asset Global Investments, said, "Since passive funds that track indices exactly differ in performance mainly due to cost differences, although the U.S. stock market has been sluggish since the beginning of the year, the long-term growth potential of the U.S. market centered on AI will continue."
He added, "TIGER ETFs will continue to create an era where investors can invest in Asia’s largest S&P500 and Nasdaq 100 ETFs at minimal costs by minimizing other expenses and trading costs."
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