The exchange-traded fund (ETF) market has surpassed 180 trillion won, continuing its growth trend. This has prompted small and mid-sized asset managers, who have been reluctant to launch ETFs, to challenge themselves by introducing new products. They are finally embracing ETFs as a source for future revenue and are expanding their operations. Asset managers that have newly entered the ETF market, alongside those launching consecutive new products since the beginning of the year, are expanding their ETF businesses in various ways.
According to the financial investment industry on the 3rd, IM Asset Management will launch the "IM Asset 200" ETF on the 11th and enter the ETF market. It has been confirmed that it received approval for listing from the Korea Exchange last month.
IM Asset Management primarily managed public funds until now but has selected the ETF business as a new source of revenue for diversification. Since last year, they have organized a related task force (TF) team and have been developing products. IM Asset Management plans to promote the development of equity-type products starting with this index-based ETF.
IBK Asset Management began to increase its products by launching the "ITF K-AI Semiconductor Core Tech" ETF on Jan. 21. This marks the first launch of the "ITF 200" after a year and a month since its debut in December 2023. The "ITF K-AI Semiconductor Core Tech" ETF invests in 20 domestic listed companies related to core technologies in artificial intelligence (AI) semiconductors.
Small and mid-sized asset managers have focused on public funds, including EMP funds (ETF-managed portfolios), as they believe that there are lower entry barriers and greater cost efficiency compared to ETFs. However, with significant capital flowing into ETFs from institutions and individuals recently, leading to an expanded market size, these asset managers have also actively developed ETF products.
The same applies to active ETF specialized asset managers. Asset Plus Asset Management recently received approval for the listing of the "Asset Plus India Corporations Focus 20 Active" ETF from the exchange. The Corporations Focus, one of Asset Plus's ETF brands, invests extensively in core corporations listed in the global stock market. Last year saw the launch of Chinese and global investment products, and this year, the lineup has expanded to include India. This ETF will list on the securities market at the end of this month.
They have decided to introduce artificial intelligence (AI) technology to seek product differentiation. Asset Plus Asset Management will create ETFs using algorithms from its subsidiary, Alpha Bridge, in the second half of this year. A representative from Asset Plus stated, "Currently, two of our public funds are managed using algorithms from Alpha Bridge, and we plan to apply the same structure to the ETFs."
There are also asset managers that have launched products consecutively while recruiting talent. Hana Asset Management changed its ETF brand from "KTOP" to "1Q" in April last year and subsequently launched four ETFs including "1Q CD Interest Rate Active (Synthetic)," "1Q Hyundai Motor Group Bonds (A+ or higher) & Treasury Short-term Bonds," and "1Q Korea Value Up" starting in September of the same year. As their first product of this year, they listed the "1Q U.S. Dividend 30" ETF on the 21st of last month. Additionally, they recruited Kim Seung-hyun, who had been in charge of ETF marketing at Korea Investment Trust Management, to oversee their ETF operations.
The entry of small and mid-sized asset managers into the ETF market is expected to diversify the selection of products available to investors. However, the market share of large firms remains overwhelmingly high. As of the end of December last year, the combined net worth share of the top two asset managers, Samsung Asset Management and Mirae Asset Global Investments, accounted for 74.3% of the entire ETF market.
A representative from one asset management firm noted, "While the market share of large firms is on the decline, if the newly entering small and mid-sized asset managers fail to generate high revenue or create distinctive products, they may struggle to attract investors' interest."