As the total net worth of domestic exchange-traded funds (ETFs) neared 180 trillion won, actively managed ETFs overseen by fund managers are leading market growth. In particular, as the stock market experienced significant fluctuations last year, large amounts of capital flowed into actively managed ETFs, which could yield relatively high revenue.

As investor interest grew, asset management companies specializing in actively managed ETFs actively launched new products. Last year, various ETFs themed around American artificial intelligence (AI) and domestic and international biotechnology were introduced. The ETF with the highest revenue over the past year was a product from Timefolio Asset Management.

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According to the Korea Exchange on the 13th, the total net worth of actively managed ETFs reached 60.523 trillion won as of the 9th, marking an increase of more than 20 trillion won compared to a year ago (39.19 trillion won). This accounts for about 40% of the total net worth increase of all ETFs, which stood at 55.8 trillion won. While a significant portion of this was from parking-style (short-term investment) ETF investments, even excluding that, the overall net worth increased. Over the past year, the number of actively managed ETFs rose from 176 to 239, an increase of 63 (36%).

Unlike passive products that have a correlation coefficient of 0.9 with the underlying index, actively managed ETFs are designed to track the underlying index within 0.7. They track the index by only 70%, while the remaining 30% allows the manager to freely construct a portfolio in pursuit of high revenue.

In the domestic market, there are eight asset management companies that exclusively operate actively managed ETFs, including Timefolio, Samsung Active, Asset Plus, Korea Investment Value, and Hyundai Asset Management. Kiwoom Asset Management operates an active specialty brand called "Heroes"; however, on the 14th of this month, it plans to unify it with its passive (KOSEF) brand under the name "Kiwoon."

Among them, Timefolio ETF's performance was particularly outstanding. Three of the top five ETFs based on fluctuation rate were Timefolio products.

Over the past year (from Jan. 10, 2024, to Jan. 10, 2025), the fluctuation rate of actively managed ETFs showed that "Timefolio Global AI Active" recorded a 78.46% increase, securing the top spot. It was followed by "Timefolio U.S. Nasdaq 100 Active" (77.84%), "Asset Plus Global Platform Active" (77.73%), "Timefolio U.S. S&P 500 Active" (65.59%), and "Asset Plus Global Smithing Active" (57.55%) ETFs.

Graphic=Jeong Seo-hee

As of the 9th of this month, the total net worth of 13 Timefolio ETFs listed in South Korea is 1.03 trillion won, making it second only to Kiwoom's active ETF brand Heroes (15 products, 1.2524 trillion won). Among domestic asset management firms specializing in actively managed ETFs, it has the largest net worth.

Timefolio noted, "We demonstrated management capability both in the U.S. stock market and in the domestic stock market, which was weak in the second half of last year," adding that, "The 'Timefolio K-Bio Active' ETF actively incorporated leading stocks like Alteogen, resulting in a 30% increase over the year."

While revenues are high, the management scale is generally smaller than that of bond or interest-rate products. Actively managed ETF companies primarily manage equity products, resulting in a total AUM of 3 trillion won, which accounts for about 5% of the entire ETF market. This leads to limitations such as lower liquidity and relatively higher expenses.

In this regard, asset management companies plan to focus on developing differentiated actively managed ETFs aimed at high revenue. Director General Cho Sang-jun of Timefolio Asset Management stated, "This year, we plan to list one domestic and one overseas investment ETF each quarter."