With the exchange-traded fund (ETF) market on the verge of surpassing 300 trillion won, KB Asset Management is struggling to shake off weakness in the ETF institutional sector. Despite a rebranding last year and large-scale support from affiliates this year, it ceded third place in the industry to Korea Investment Management and has carried out two organizational reshuffles this year alone. With the heads of the ETF business changing in succession, signs of staff departures are also being detected.
According to the financial investment industry on the 9th, No Areum, head of the ETF Management Division at KB Asset Management, plans to resign at the end of this month and move to IBK Securities starting next year.
No, who took the helm of the ETF business as head at the start of the year, saw the title change when, in last month's reorganization, the unit was split into the management division and the product marketing division. Previously involved in everything from portfolio management to product launches and ETF marketing, No was left only with management authority after the overhaul. The main duties were assigned to the new head of the ETF Product Marketing Division, Yuk Dong-hwi, who had served as head of the Retirement Wealth Management Division.
As with No, there was a case early this year in which the head of the ETF unit at KB Asset Management was replaced in roughly a year. Chief Executive Kim Young-seong, who took office last year, tapped at his first personnel round Kim Chan-young, then head of Digital ETF Marketing at KIM, to lead the ETF business division.
Kim, as head, is credited with playing a major role in 2022 by changing KIM's ETF brand from KINDEX to ACE and lifting its market share. At KB Asset Management, he also pursued aggressive marketing, including changing the ETF brand in July of the same year from "KBSTAR" to "RISE," but fell short of expectations and stepped down after a year.
KB Asset Management's assets under management (AUM) stood at 21,466.2 billion won as of the 5th, for a market share of 7.4%. It ranks fourth, following KIM, which has 24,946.8 billion won (8.6%) in AUM.
Compared with the end of last year (13,564.3 billion won, 7.8%), KB Asset Management's net asset size rose 58%. But given that total ETF AUM grew about 70% over the period, from 173,563.9 billion won to 291,548.0 billion won, it effectively lost ground. Its market share fell by 0.4 percentage points.
With Samsung Asset Management and Mirae Asset Global Investments securing an overwhelming market share of more than 30% each, the battle for third and fourth between KB Asset Management and KIM had been fierce. In particular, as KIM's net assets rose sharply last year, KB Asset Management yielded third place at the end of last year for the first time in 10 years. Thanks in part to more than 300 billion won in investments from group affiliates in the "RISE Short-Term Special Bank Bonds Active" ETF launched at the end of June this year, KB Asset Management regained third place in July, but it was pushed back to fourth again as the net asset gap widened to nearly 3.5 trillion won thereafter.
The biggest reason it lagged KIM in market share is seen as individual investors' choices. According to Koscom Check, individuals bought a total of 1,619.2 billion won worth of KB Asset Management ETFs this year (Jan. 1–Dec. 5). That is about half the 3,051.2 billion won in net purchases of KIM ETFs over the same period.
KB Asset Management accounted for 5.2% of total individual net ETF purchases (3,104.2 billion won), compared with 9.2% for KIM, a wider gap than their market shares. As a result, some say the rebranding that dropped the holding company's name had less effect than expected, and newly launched ETF products lacked differentiation.
KB Asset Management plans to work to regain market share by aiming for product differentiation. "We will steadily roll out products with structures suited for transparency and long-term holding, such as the daily fixed covered call series and global asset allocation products," said Yuk Dong-hwi, head of the ETF Product Marketing Division, adding that "we set 'inducing investment in predictable and easy-to-understand products' as our differentiation point."