Simultaneous Investment in Hundreds of Assets to Spread Risk... EMP Funds Holding Multiple ETFs Gain Popularity

EMP Fund Assets Jump 77.30% in One Year
Investing in Multiple ETFs for Stable Diversification

As the total net assets of domestic exchange-traded funds (ETFs) have surpassed 378 trillion won, funds that invest in multiple ETFs, known as EMP (ETF Managed Portfolio) funds, are also attracting capital.

According to FnGuide on the 27th, assets under management in domestic EMP funds are on the rise. From 935.4 billion won at the beginning of 2024 and 1.0611 trillion won at the beginning of last year, the figure had increased to 1.8813 trillion won as of the 24th. This represents an increase of about 77.30% (820.2 billion won) over one year.

EMP funds are asset-allocation funds that invest 50% or more of their portfolio in exchange-traded products such as ETFs and exchange-traded notes (ETNs). They can maximize diversification effects by holding multiple ETFs, each of which already contains numerous securities, thereby investing in hundreds of assets simultaneously. They are more stable than individual stock investments, and another feature is that the asset manager can adjust asset weights according to market conditions.

The performance of domestic EMP funds has also been stable. Their average returns are 9.40% over three months, 15.74% over six months, and 18.98% over one year. This is similar to the performance of domestic overseas-equity ETFs, and EMP funds actually outperformed in three-month returns. The average returns of domestic U.S.-equity ETFs are 5.65% over three months, 16.82% over six months, and 19.51% over one year.

Asset management companies are actively launching EMP fund products as well. As of the 24th, out of 73 domestic EMP funds, 14 were newly established last year, and two more EMP funds have been launched in the first two months of this year. Hanwha Asset Management has also begun marketing the “Hanwha Dynamic Concentrated Buying EMP Target Maturity Fund.” Based on the final amount raised, it is scheduled to be established on March 9.

Samsung Asset Management, riding the popularity of target-maturity EMP funds, has launched up to the sixth tranche of the “Samsung Discretionary Investment EMP Target Maturity” series this year. This product utilizes bond and equity ETFs, with a portfolio composition of at least 50% bonds and less than 50% equities, while flexibly adjusting the allocation depending on market conditions. Once the target return of 7% is reached, the fund shifts mainly into short-term bond-related assets and cash-equivalent assets to preserve gains. There is no separate redemption fee for early withdrawals, which also enhances investment convenience.

A Samsung Asset Management representative explained the background of EMP’s popularity, saying, “It automatically invests in domestic bonds and domestic thematic ETFs, and when the target-maturity return is achieved, it automatically shifts into safe assets to preserve profits. This seems to appeal to investors as it helps relieve investment fatigue amid complex market conditions.”

This content was produced with the assistance of AI translation services.