KOSDAQ active ETFs (exchange-traded funds) crossed 1 trillion won in net worth (AUM) in four trading days after listing. Investment enthusiasm in the domestic stock market, which had slowed due to the U.S.-Iran war fallout, is moving quickly to the KOSDAQ market.
According to Koscom ETF Check on the 17th, as of the 13th, Samsung Asset Management's "KoAct KOSDAQ Active" had AUM of 871.8 billion won. 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 AUM of 471.2 billion won (163rd). The combined AUM of the two products reached 1.343 trillion won, joining the "1 trillion club" four days after listing.
Individual investors drove this success. Individual investors made net purchases of 818.7 billion won in KoAct KOSDAQ Active and 381.2 billion won in TIME KOSDAQ Active, showing an aggressive investment stance.
Competition among managers is expected to heat up. Hanwha Asset Management will join by listing "PLUS KOSDAQ 150 Active" on the 17th. The product benchmarks the KOSDAQ 150 index and is characterized by seeking relatively stable revenue.
Mirae Asset Global Investments will also list the "TIGER Tech Transfer Bio Active" ETF on the same day. Although it does not carry the KOSDAQ Active name, it plans to build a portfolio centered on bio corporations leading the KOSDAQ market. The bio weighting within the KOSDAQ 150 index is about 40%, the highest among single industries.
The industry is expressing hopes that KOSDAQ active ETFs will enliven the market. There is speculation that, as supply and demand through ETFs increase, funds will flow in.
Yun Jae-hong, a researcher at Mirae Asset Securities, said, "Existing KOSDAQ ETFs mainly track the KOSDAQ 150 index and the KOSDAQ Global index, concentrating on KOSDAQ large caps. With the listing of KOSDAQ active ETFs, previously overlooked quality stocks can now come to the fore."
As investment strategies differ by company, attention is also focusing on ETF performance under various market conditions. Even comparing just the two listed ETFs, TIMEfolio Asset Management's ETF is building a portfolio mainly of KOSDAQ large caps, while Samsung Active Asset Management's ETF is composed more around smaller market-cap stocks.
Seol Tae-hyun, a researcher at DB Securities, analyzed, "The TIME ETF can maximize leverage and expect strong revenue when momentum in large-cap stocks by market capitalization strengthens," adding, "The KoAct ETF has a relatively low correlation with the index, making it advantageous in a stock-picking market where individual stocks' fundamentals stand out."
Researcher Yun said, "TIMEfolio Asset Management pursues maximization of returns with a relatively concentrated portfolio, while Samsung Active Asset Management runs a relatively broader set of industries," adding, "For investors who want to operate a concentrated portfolio centered on leading sectors, TIME KOSDAQ Active is suitable, and for those who want to operate broadly in policy-beneficiary industries, KoAct KOSDAQ Active is suitable."
There are also many concerns. In a surging bull market, it is not easy to outperform the returns of passive ETFs that track the index.
An official in the financial investment industry noted, "It is ideal when the stocks selected by portfolio managers mesh precisely with market conditions, but if the prediction misses, short-term revenue may actually underperform the index."
The KOSDAQ stocks' unique supply-demand instability is also a challenge to solve. Because KOSDAQ stocks have smaller market capitalizations than KOSPI, volatility can be amplified, with prices surging or plunging simply from inflows into a particular ETF.
In fact, Sungho Electronics, the top-weighted stock in the KoAct KOSDAQ Active ETF, was designated an investment warning issue on the 13th. As the ETF adjusted its portfolio after listing on the 10th and raised Sungho Electronics' inclusion weight from No. 2 to No. 1, a concentration of flows appears to have emerged.