By 2030, the total global ETF (Exchange Traded Fund) asset size is expected to exceed $25 trillion (about 3.4973 quadrillion won).
Elaine Wu, head of Asia-Pacific investment and portfolio solutions at global asset management company BlackRock, noted that the increasing number of people investing in ETFs stems from 'convenience, cost-effectiveness, and efficiency.' Currently, BlackRock manages over 1,400 ETF products named 'iShares,' into which more than 6000 trillion won of global funds have flowed. Wu predicted that ETFs investing in the U.S. will continue to show the best prospects in the new year, following this year. "This is because the U.S. economic growth remains robust and expectations for interest rate cuts are high," she said. Although it is true that the outlook for the Korean stock market, which has been sluggish this year, is mixed, she viewed its undervaluation compared to other emerging markets positively. The price-to-earnings ratio (PER) of the Korean MSCI index is about 8 times, lower than the emerging market average of 13.5 times. The following is a Q&A.
The current size of the global ETF market is.
The total global ETF asset size has reached $15 trillion (about 2.984 quadrillion won), of which about $4.3 trillion (about 601.5 trillion won) is invested in the ETF product iShares, which BlackRock operates with over 1,400 ETFs.
Reasons for the steady growth of the ETF market.
The reason the ETF market continues to grow is that ETFs have significantly expanded investment accessibility, allowing millions of new investors and experienced investors to access all types of markets more conveniently, economically, and efficiently. ETFs bundle multiple assets into a single product that can be easily bought and sold on exchanges, enabling millions of new investors to invest in various markets without complicated processes. Even professional investors can conveniently and effectively construct their portfolios.
Recently, there is also a high demand for bond ETFs besides equity ETFs.
Yes. In fact, the demand for bond ETFs has greatly influenced the growth of the current ETF market. BlackRock was the pioneer that first introduced bond ETFs 20 years ago. In the past, checking bond prices required making as many as five phone calls, but now it only takes a few clicks to buy and sell an entire bond portfolio. Currently, over $1 trillion (about 1,400 trillion won) in assets have flowed into the bond ETFs managed by BlackRock's iShares. We expect the total bond ETF asset size in the industry to reach $6 trillion (about 839.3 trillion won) by 2030 or even earlier. In particular, in a market with high volatility and uncertainty like now, bond ETFs are expected to attract even more attention.
Do you expect the entire ETF market to grow larger?
Yes. However, the current size of ETF assets is still only a small part compared to the overall stock and bond markets. In fact, in the Asia-Pacific region, ETFs represent 5% of stock assets and 0.5% of bond assets. However, in the U.S., they account for 13% of stock assets and 3% of bond assets. This indicates there is room for the ETF market to grow further in the Asia-Pacific region. Ultimately, we expect the global ETF market to exceed $25 trillion by 2030.
Which ETF has recorded the highest revenue at BlackRock this year?
This year stands out as a year characterized by 'U.S. exceptionalism,' with U.S.-related ETFs performing the best. If one had invested in the U.S. stock market, they would have seen an average total profit of 27.8% compared to the beginning of the year. This was driven by the technology, finance, communication services, and utility sectors, including semiconductors. As economic growth continued steadily, many investors chose well-performing cyclical stocks, especially financial stocks. Additionally, growth in the technology sector accelerated the recovery of the U.S. stock market, which had gone through a downturn at the beginning of the year. Lastly, expectations for interest rate cuts also drew investors' attention to the utility sector.
Do you believe it's a good idea to invest in the U.S. again in the new year?
Yes. At this point, ahead of 2025, I believe there are more opportunities to seize in the U.S. stock market. The U.S. economic growth remains solid. Furthermore, expectations for interest rate cuts indicate a monetary policy easing. In particular, during the third-quarter earnings announcements this year, companies' earnings per share (EPS) growth rate recorded 7%, sending positive signals. As corporate performance generally improves, technology stocks might not lead earnings growth as they did over the past 18 months in 2025. However, as long as the improvements are supported by performance, the outlook for technology stocks as a whole remains positive.
What ETFs would you recommend to investors in the new year?
While I have confidence in U.S. stock market growth, I believe careful selection of investment targets is necessary in the global stock market. This is because market performance can vary depending on regions or sectors. However, if I had to identify countries with positive outlooks, I have strategic confidence in China and India in the Asian region. China's policy momentum has shifted positively, and further positive changes are anticipated. Nonetheless, considering the structural issues China faces, I maintain a cautious stance on the long-term outlook. Conversely, India's outlook for the stock market is structurally solid. With a low foreign investment ratio, Indian stocks offer differentiated diversification opportunities compared to global stocks.
Finally, if you could give tips for selecting good ETFs?
First and foremost, the most important factor in selecting an ETF is its quality. Not all ETFs are created equal. Therefore, it is essential to check whether the ETF accurately tracks its benchmark index. In other words, it's important to see how faithfully the ETF follows the movements of the index it aims to track. Additionally, one should choose ETFs that can provide liquidity in various market situations, meaning those with sufficient trading volume and are actively traded in the market. Furthermore, the size, expertise, and technology of the ETF management company impact the ETF's performance, so selecting a trustworthy management company is crucial. BlackRock's iShares, with over 20 years of operational experience, provides the most extensive and highest-quality ETFs, emphasizing their ability to offer quality, variety, performance, and cost-effectiveness simultaneously.