KB Asset Management's recently launched exchange-traded fund (ETF) has been reported to be held by group affiliates totaling 370 billion won. As of June 30 this year, the ETF's net worth was 910.7 billion won, meaning the affiliates bought about 41% of it.
This product has recently contributed to KB Asset Management regaining its position as the third largest in the ETF market share. Previously, there were suspicions that KB Asset Management received push from KB Financial Group as part of the one-year anniversary of its ETF rebranding.
In response, KB Asset Management clarified that affiliates only deposited funds for liquidity management and that the ETF balance held by affiliates actually decreased compared to the previous year. The amount of KB Asset Management ETF held by KB Financial affiliates decreased from 1.2249 trillion won in the second quarter of last year to 875 billion won in the second quarter of this year.
According to data provided by the Financial Supervisory Service submitted by People Power Party lawmaker Kim Sang-hoon from the National Policy Committee on the 31st, as of the end of the second quarter this year, the size of the KB Asset Management ETF held by four financial affiliates of KB Financial Group is 875 billion won. This figure is based solely on the proprietary holdings, excluding liquidity provider (LP) holdings and client asset holdings.
In particular, the recently launched 'RISE Short-Term Special Bank Bond Active ETF' is held by two out of the four affiliates, totaling 370.3 billion won as of the end of the second quarter.
The RISE Short-Term Special Bank Bond Active ETF, launched by KB Asset Management on June 24, is based on short-term bonds issued by special banks such as the Korea Development Bank, Export-Import Bank, and Industrial Bank of Korea, with an average duration of about three months.
This product succeeded in attracting attention immediately after its launch, helping KB Asset Management reclaim its position as the third largest in the ETF market share. KB Asset Management underwent a rebranding in July last year, changing its ETF brand from 'KBSTAR' to 'RISE.' After having conceded the third place in the ETF market share to Korea Investment Management at the beginning of this year, KB Asset Management regained the third place at the one-year mark.
The RISE Short-Term Special Bank Bond Active ETF, listed with an initial amount of 360 billion won, attracted 550.3 billion won in funds over a mere three days from June 25 to 27. It exceeded a net worth of 1 trillion won in just 14 business days. As of the previous day (28th), the net worth of this ETF was around 1.0907 trillion won.
However, a representative from KB Asset Management said, "The funds that had been in other funds for the existing affiliates' liquidity management have moved to this ETF," adding, "Funds from other bank-affiliated financial companies are also invested in this ETF."
The difference between the third and fourth places in ETF market share is quite minimal, and the competition between the two companies is fierce. As of the 26th, KB Asset Management's ETF market share was 7.79%, only 0.15 percentage points ahead of the fourth-place Korea Investment Management (7.64%). The difference in net worth totals only around 350 billion won.
Meanwhile, other asset management companies with financial affiliates also appear to hold a large number of ETFs launched by their affiliates.
As of the end of the second quarter this year, Samsung Group's financial affiliates hold a total of 1.7924 trillion won in ETFs from Samsung Asset Management. In the case of Mirae Asset Financial Group's financial affiliates, they hold 2.4022 trillion won in Mirae Asset Global Investments ETFs, Hanwha Group's financial affiliates hold 152.2 billion won in Hanwha Asset Management ETFs, and Shinhan Financial Group's financial affiliates hold 173.2 billion won in Shinhan Asset Management ETFs.
The amount of ETFs held by affiliates has generally increased compared to the previous year. In the case of Mirae Asset Group, as of the end of the second quarter this year, it increased by 20% compared to the previous year. ▲ Hanwha Group's financial affiliates increased by 25% ▲ Shinhan Financial Group's affiliates increased by 46%.
Kim Sang-hoon said, "The large-scale acquisition of asset management company ETFs by financial group affiliates may be a part of liquidity management, but it could also be a 'push for affiliates' to expand market share," and stressed that "financial authorities should conduct more thorough inspections of the transaction structures and fund movements between affiliates for investor protection and market fairness."