S. Korea’s ETF market reaches record $37 bn in 2018

2019.01.09 15:12:13 | 2019.01.09 16:25:40

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South Korea’s exchange-traded fund market expanded sharply last year amidst protracted low-interest rate environment with total net asset value reaching an all-time high of 41 trillion won ($36.5 billion), the country’s bourse operator said Wednesday.

According to Korea Exchange, the net asset value of ETFs listed on the Korean stock market amounted to 41 trillion won as of the end of last year, up 15.2 percent from a year earlier. A total 10.1 trillion won worth of funds flowed into the ETF market last year alone.

An ETF is a type of fund that represents a basket of stocks reflecting an index and can be traded on stock exchanges.

Data showed that ETF trading price hit a record high last year as investors sought market-oriented investment using ETFs amid falling stock price. The average daily trading volume of ETFs reached 1.5 trillion won last year, up 49 percent from a year ago. A total of 413 ETFs were available on the market as of the end of last year, up 27 percent from a year ago. The number of ETFs with 100 billion won or more in net asset value, which are preferred by institutional investors, reached 53, up 15 from the previous year.

Total net asset of ETFs accounted for 2.6 percent of the overall stock market, up 0.7 percentage point from a year ago. They also outperformed other types of stock investment.

Among local stock-type funds including active funds, all top 8 in terms of annual yield were ETFs. The No. 1 item based on average daily transaction was KODEX Kosdaq 150 Leverage, which accounted for 18.7 percent of total trading volume.

Among the funds, the annual yield of ARIRANG 200 Futures Inverse 2X was highest at 43 percent. However, the bearish global stock market has led average yield of ETFs to remain at 10.7 percent last year with price increase items outnumbering decreased ones.

By Chung Seul-gi and Lee Eun-joo

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