KB Asset Management (KB Management) has reclaimed the third spot in the exchange-traded fund (ETF) market share. However, some speculate that the ETF with the largest increase in net worth during this process was based on bank bonds, suggesting there might have been group-level support coinciding with the one-year anniversary of the ETF rebranding.
According to the Korea Securities Depository (KSD) on the 29th, the total net worth of KB Management's ETF as of the 25th was 17.34 trillion won. Based on total net worth, its market share stands at 7.8%, ranking third after Samsung Asset Management (38.4%) and Mirae Asset Global Investments (33.3%). The market share gap between KB Asset Management and the fourth-ranked Korea Investment Management was 0.2 percentage points (459.9 billion won).
KB Management changed the brand of its ETF from 'KBSTAR' to 'RISE' in July of last year and initiated aggressive marketing. KB Asset Management spent over 6.5 billion won on advertising last year, which is more than quadrupled compared to 2023.
Within a year of the rebranding, KB Management increased the number of ETFs it manages from 110 to 123, adding 13. During the same period, total net worth also surged from 12.02 trillion won to 17.34 trillion won, marking a 44.3% increase (5.32 trillion won).
However, it is difficult to assess this as solely the result of ETF rebranding. KB Management's market share based on total net worth has only increased by 0.1 percentage points over the past year. Notably, this year, it has lost the third spot in market share to Korea Investment Management. In March, the total net worth of KB Management fell nearly 1 trillion won behind Korea Investment Management.
The ETF 'RISE Short-Term Special Bank Bond Active,' which was listed on the 24th of last month, played a significant role in helping KB Management reclaim the third position. This ETF is based on short-term securities issued by special banks such as the Industrial Bank of Korea, Export-Import Bank of Korea, and the Korea SME Bank, with an average duration of about three months.
RISE Short-Term Special Bank Bond Active was listed on the 24th of last month with an initial setup amount of 360 billion won. Following this, approximately 550 billion won in funds flowed in from the 25th of last month to the 27th. Through RISE Short-Term Special Bank Bond Active, KB Management significantly increased its ETF net worth by over 1 trillion won, allowing it to retake the third spot in market share from Korea Investment Management on the 2nd of this month and widen the gap.
There are claims in the industry that KB Management launched RISE Short-Term Special Bank Bond Active to coincide with the one-year anniversary of the ETF rebranding. This suggests that there may have been group-level support to restore its market share.
An official from an asset management company noted, 'The setup amounts for recently listed bond-type ETFs are generally around 100 billion won, but the initial setup amount for (RISE Short-Term Special Bank Bond Active) was significant at 360 billion won.' He added, 'Coincidentally, the timing of its launch was just ahead of the one-year rebranding anniversary.'
Due to intense competition among asset management companies, suspicions have persisted that group affiliates are supporting funds for parking ETFs. In response, the Financial Supervisory Service conducted on-site inspections targeting asset management companies last year. (Related article☞[Exclusive] The ETF '100 trillion era' has begun, but affiliates are buying billions in funds)
Concerns over preferential treatment for affiliates have continued to be raised by latecomers in the industry. Choi Young-jin, Executive Director of Hanwha Asset Management, stated at a recent meeting marking the one-year anniversary of Hanwha Asset Management's rebranding, 'We are not concerned about our target market share (MS). We are different from companies that suddenly increase bond funds by 2 to 3 trillion won by mobilizing affiliates.' Some in the management industry interpret that Executive Director Choi's comments were aimed at KB Management and industry leader Samsung Asset Management.
KB Management has stated that RISE Short-Term Special Bank Bond Active is popular due to its stability as a bond with a credit rating equivalent to government bonds, offering higher returns than other short-term parking ETFs.
An official from KB Management explained, 'Recently, short-term special bank bonds have attracted demand due to high interest rate volatility, and we estimate that large securities firms and banks have invested heavily in special bank bond-based products as they are safer than government bonds while offering higher returns.'