With exchange-traded funds (ETFs) in Korea currently trading only during regular hours (9 a.m.–3:30 p.m.), an assessment emerged that competition in the ETF market will intensify as Nasdaq adopts a five-day, 23-hour trading system starting at the end of the year. On top of that, platform competition between traditional financial firms and crypto exchanges is also expected to grow.
On the 8th, Park U-yeol, senior researcher at Shinhan Investment & Securities, held a press briefing at the Korea Exchange (KRX) under the theme "An ETF market that broadens its base."
Park said, "ETFs listed in Korea can be traded in the Korean market from 9 a.m. to 3:30 p.m., and for ETFs listed in the United States, only over-the-counter trading is available during the hours we are awake," adding, "But starting at the end of this year, Nasdaq will begin 23-hour trading, five days a week, creating a situation where Nasdaq's regular session becomes a direct competitor to KOSPI."
He also saw platform competition between traditional financial firms and crypto exchanges becoming fierce. On crypto exchanges, investors can trade not only real assets but also stocks and ETFs. Representative ETFs tradable on crypto exchanges include SOXL (which tracks three times the daily return of the U.S. semiconductor index) and KORU (three-times leverage on the Korea index), both popular among domestic investors.
Park added, "The crypto exchanges' trading value for these ETFs is not negligible even compared to the main session," noting, "Crypto exchanges operate 24 hours and are absorbing the gaps in traditional finance during over-the-counter hours and on weekends."
Conversely, there are also cases of traditional financial firms acquiring crypto exchanges. A representative example is Mirae Asset Group.
Park explained, "In conclusion, platform competition between traditional finance and digital finance has begun," adding, "Stocks, bonds, ETFs, and commodities can all be traded in securities accounts, and they can also be traded in crypto accounts."
He went on to analyze, "Accordingly, traditional financial firms are responding by acquiring crypto exchanges."
As an asset allocation strategy, he proposed "60% stocks, 30% bonds, 8% gold, and 2% bitcoin," instead of the traditionally pursued "60% stocks and 40% bonds" ratio.
Park said, "Recently, stocks and bonds have begun rising and falling together," adding that when factoring in risk-adjusted performance, favorable results emerged, leading to the establishment of this allocation-ratio strategy.
Meanwhile, as an ETF investment strategy worth noting this month, Park presented the U.S. Dow Jones dividend index as the top preference. Unlike domestic dividend stocks, U.S. dividend stocks have higher weights in energy, healthcare, and consumer staples, which he analyzed to be advantageous in an environment of heightened volatility such as geopolitical risk.
Regarding single-stock leveraged ETFs, which had been cited as a cause of increased volatility in the domestic stock market, he explained that their recent trading value has plummeted to about one-tenth, adding, "Wouldn't that mean there will be no volatility disruptions going forward?"