Korea Investment Management, which has focused on U.S. stock exchange-traded funds (ETFs), will introduce two Chinese stock ETFs within a month. It appears that KIM is making efforts to diversify its products, given the heavy concentration on U.S. stock-based ETFs.
According to the financial investment industry on the 28th, KIM plans to launch an ETF containing Chinese big tech stocks as early as the end of this month. KIM recently listed a new fund called "ACE BYD Value Chain Active" that invests in Chinese electric vehicle company BYD and related corporations on the 14th, marking the introduction of two Chinese stock ETFs within a month.
It is unusual for KIM to continue introducing Chinese stock ETFs. KIM has primarily focused on overseas equity, especially ETFs based on U.S. stocks. Of KIM's total 98 ETFs, the number based on U.S. stocks is the largest at 35.7% (35), while domestic stock ETFs make up 19.4% (19) and Chinese stock ETFs account for 5.1% (5).
The main reason KIM is introducing Chinese stock ETFs is product diversification, but it seems the intense competition in the ETF market is also having a significant impact. In the case of U.S. big tech-related ETFs that helped boost KIM's net worth, the industry leaders Samsung Asset Management and Mirae Asset Global Investments are engaging in aggressive marketing like lowering management fees, which has caused KIM to slow down.
In particular, as the domestic stock market has shown a sharp upward trend, KIM's weakness has been exposed due to the absence of a killer product among domestic equity ETFs. For example, Hanwha Asset Management and Shinhan Asset Management, which rank 5th and 6th in the industry, have expanded their size by more than 3 trillion won compared to the beginning of the year, thanks to the popularity of funds like PLUS K Defense, PLUS High Dividend Stocks, and SOL Shipbuilding TOP3 Plus.
On the other hand, the gold-related ETFs that have been "cash cows" for KIM have lost their strength due to the emergence of similar products. According to the ETF check by Koscom on this day, the TIGER KRX Gold Spot ETF saw a net inflow of 54 billion won over the past month, while KIM's ACE KRX Gold Spot ETF experienced a net outflow of 6.2 billion won during the same period. Ultimately, KIM has decided to lower its total fee rate to align with Mirae Asset Global Investments.
A source from an asset management company stated, "This year, domestic equity ETFs are bound to gain attention due to policy expectations," and added, "From KIM's perspective, where the ETF lineup is relatively concentrated on U.S. tech, there may be concerns."