Samsung Asset Management, which holds the No. 1 share in the exchange-traded fund (ETF) market, is facing industry criticism for copying the exact name of a hit product from a small and mid-sized asset manager. After the Financial Supervisory Service warned against "copycat listings" for new products, critics say the firm evaded oversight by using a gambit of changing the name and index of an existing listed product.
According to the investment industry on the 11th, Samsung Asset Management last month abruptly changed the name of its existing artificial intelligence (AI) semiconductor theme ETF, KODEX AI Semiconductor, to KODEX AI Semiconductor TOP2 Plus.
The problem is that the new name is exactly the same as the title of a flagship hit product from the small and mid-sized firm Shinhan Asset Management. Earlier, on Mar. 17, Shinhan Asset Management listed SOL AI Semiconductor TOP2 Plus, which focuses on large-cap domestic semiconductor stocks and the core value chain. The product uses the FnGuide AI Semiconductor TOP2 Plus Index as its underlying index.
SOL AI Semiconductor TOP2 Plus surpassed 1 trillion won in cumulative net purchases by individual investors in about two months after listing, ranking No. 1 among domestic semiconductor ETF products launched during the same period.
The asset management industry notes that this is not the first time Samsung Asset Management has copied a hit product.
Previously, when KB Asset Management launched RISE Samsung Electronics SK hynix Bond Mixed 50 in Feb. to get a head start in the retirement pension market, Samsung Asset Management rolled out KODEX Samsung Electronics SK hynix Bond Mixed 50 in Apr., two months later, prompting criticism that it brought the copycat controversy upon itself.
Financial authorities have also warned since late last year that they would step up oversight of the widespread practice of product copying in the asset management industry. At the time, Lee Chan-jin, governor of the Financial Supervisory Service, said, "We will strictly supervise 'self-defeating' competition, such as the concentrated launch of products riding short-term fads."
An asset management industry official criticized, "Samsung Asset Management is going beyond copying newly listed products and even resorting to the gambit of 'changing existing products,'" adding, "If it goes through new listing procedures, it could face strong monitoring and sanctions by the authorities, so it appears to be trying to skirt regulation by 'rebranding'—completely changing the name and index of an ETF that was already listed."
Another asset management industry official said, "The SOL AI Semiconductor TOP2 Plus ETF ranks No. 1 in individual net purchases this year and is regarded as Shinhan Asset Management's tour de force," adding, "It is not ethically right for Samsung Asset Management, the industry leader, to effectively take over the results achieved by a small and mid-sized firm."
Samsung Asset Management said the allegations of product copying are untrue.
A Samsung Asset Management official said, "It is a coincidence that occurred during our independent product planning in line with changing market trends," adding, "We only appeared to be a latecomer due to differences in speed during the exchange's review process."