KOSDAQ active ETFs (exchange-traded funds) topped 1 trillion won in net worth (AUM) just four trading days after listing. Investment enthusiasm in the domestic stock market, which had slowed due to the U.S.-Iran war, is rapidly shifting to the KOSDAQ market.
According to Koscom ETFCheck on the 17th, as of the 13th, Samsung Asset Management's "KoAct KOSDAQ Active" had 871.8 billion won in AUM. That ranks 93rd among roughly 1,000 ETFs listed in Korea. TIMEFOLIO Asset Management's "TIME KOSDAQ Active," launched the same day, also performed well with 471.2 billion won in AUM (163rd). The combined AUM of the two products reached 1.343 trillion won, joining the "1 trillion club" four days after listing.
This strong run was driven by individual investors. Individual investors posted net purchases of 818.7 billion won in KoAct KOSDAQ Active and 381.2 billion won in TIME KOSDAQ Active, signaling aggressive investment moves.
Competition among asset managers is expected to heat up. Hanwha Asset Management will list "PLUS KOSDAQ150 Active" on the 17th, joining the fray. The product tracks the KOSDAQ150 index as a benchmark and aims for relatively stable returns.
Mirae Asset Global Investments will also list the "TIGER Technology Transfer Bio Active" ETF the same day. Although it is not labeled a KOSDAQ active product, it plans to build a portfolio focused on bio corporations leading the KOSDAQ market. Bio accounts for about 40% of the KOSDAQ150 index, the highest weight among single industries.
The industry expects KOSDAQ active ETFs to energize the market. As ETF-driven supply and demand increase, there is speculation that capital inflows will follow.
Yoon Jae-hong, an analyst at Mirae Asset Securities, said, "Existing KOSDAQ ETFs have mainly tracked the KOSDAQ150 and KOSDAQ Global indexes, concentrating on KOSDAQ large caps. With the listing of KOSDAQ active ETFs, previously overlooked quality names can now come into focus."
Because firms have different investment strategies, attention is also turning to how ETF performance will vary by market conditions. Even comparing the two already listed ETFs, TIMEFOLIO Asset Management's ETF is building a portfolio centered on KOSDAQ large caps, while Samsung Active Asset Management's ETF is composed more of smaller-cap names.
Seol Tae-hyun, an analyst at DB Securities, said, "The TIME ETF can maximize leverage effects and deliver strong revenue when momentum in large-cap stocks strengthens," adding, "The KoAct ETF has a relatively low correlation with the index, making it advantageous in a stock-picking market where individual companies' fundamentals stand out."
Analyst Yoon noted, "TIMEFOLIO Asset Management seeks to maximize returns with a relatively concentrated portfolio, while Samsung Active Asset Management manages exposure across a relatively broader set of industries," adding, "For investors who want a concentrated portfolio centered on leading sectors, TIME KOSDAQ Active is suitable, and for those who want broader exposure to industries benefiting from policy, KoAct KOSDAQ Active fits better."
Still, there is no shortage of concerns. In a rapidly rising bull market, it is not easy to beat the returns of passive ETFs that track the index.
A source at a financial investment firm pointed out, "It is ideal when the names selected by the portfolio manager align precisely with market conditions, but if the call is off, short-term revenue can actually lag the index."
The KOSDAQ market's inherent supply-and-demand instability is also a challenge to solve. Because KOSDAQ names are smaller in market capitalization than KOSPI names, capital inflows to a specific ETF alone can amplify volatility, causing sharp price swings.
In fact, Sungho Electronics, the top-weighted name in the KoAct KOSDAQ Active ETF, was designated an investment warning stock on the 13th. As the ETF adjusted its portfolio after listing on the 10th and raised Sungho Electronics' weight from No. 2 to No. 1, a supply-and-demand imbalance appears to have emerged.