There is an outlook that KOSDAQ active exchange-traded funds (ETFs) could bring changes to investment flows in the KOSDAQ market. Because they go beyond tracking an index to reflect managers' stock selection, analysts say a stock-picking-driven "stock market" could strengthen.
Unlike passive ETFs that simply track market indexes, active ETFs are products that seek excess revenue by strategically adjusting asset allocation.
Kang Cheon-gi, an analyst at DB Securities, said in a report on the 12th that "the launch of KOSDAQ active ETFs is creating another change in the domestic stock market." Citing three reasons, Kang said the active ETF market is likely to become more vibrant in tandem with government policy.
First, he projected that the government's move to change how domestic pension fund performance is evaluated will have a positive impact. Kang said, "When evaluating domestic fund performance, a plan was proposed to include KOSDAQ150 in the benchmark along with KOSPI," adding, "In this process, aligned with the need to aim for excess performance, KOSDAQ active ETFs are being launched."
He also cited the KOSDAQ market's policy to delist weak corporations as a factor expanding active ETFs. The Korea Exchange (KRX) released the "2026 KOSDAQ market expedited delisting plan for weak corporations" in February this year. Kang said, "Among KOSDAQ-related financial products, passive ETFs have no choice but to include potentially weak corporations that are in the index," adding, "Active ETFs, on the other hand, can exclude them, which could win investor support."
Lastly, he said the discussion on easing the index-linkage requirements for domestic active ETFs would also have an impact. Currently, domestic active ETFs must manage at least 70% of fund asset similarly to their benchmarks, but the Financial Services Commission is reviewing a plan to relax the so-called "70% rule." Kang projected, "If the new rule applies, KOSDAQ active ETFs could be operated with greater management flexibility."
Analysts say that if these changes continue, there is a possibility that a stock-picking-driven market will strengthen in the KOSDAQ market. Kang said, "If KOSDAQ active ETFs become more active and management strategies diversify, the influence on individual stocks will grow," adding, "There is a possibility that a stock-picking market will appear in the KOSDAQ market."