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Net Asset of South Korean ETF Market Topped $23 Billion
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Net Asset of South Korean ETF Market Topped $23 Billion
  • By Jung Suk-yee
  • July 22, 2016, 03:00
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The net asset value of the South Korean ETF exceeded 23 trillion won (US$20 billion) for the first time since its opening in 2002.
The net asset value of the South Korean ETF exceeded 23 trillion won (US$20 billion) for the first time since its opening in 2002.

 

The Korea Exchange announced on July 21 that the net asset value of the South Korean ETF market totaled 23.4201 trillion won (US$20.36 billion) at the end of June this year. The amount increased by 8.3% compared to the end of last year and exceeded 23 trillion won (US$20 billion) for the first time since its opening in 2002.

As of the end of May this year, the ETF market in the United States posted a net asset value of US$2.144 trillion, followed by the British (US$203.9 billion) and German (US$151.9 billion) markets. South Korea ranked tenth in the world and fourth in Asia with US$18.5 billion.

In the South Korean ETF market, the average daily trading value for the first half of 2016 added up to 796.8 billion won (US$692.8 million) to show a year-on-year growth of 14%. On June 24, the Brexit voting date, the amount hit an all-time high of 2.9345 trillion won (US$2.55 billion). The market ranked seventh in the world and third in Asia in terms of ETF trading value.

The net asset of the market accounted for 10.4% of the net asset of domestic public offering funds with the ratio increasing by 0.3 percentage points in six months. The ETF market was equivalent to 1.9% of KOSPI in terms of asset size and 16.6% in trading volume, up 1.7% and 13% in six months, respectively.

Individual investors took up 42.2% of the total trading value, followed by institutional investors (20%), foreign investors (19.5%) and liquidity providers (18.2%). The ratio of individual investors increased 4.8 percentage points while those of institutional and foreign investors decreased two and 2.4 percentage points.

The total value of ETFs investing in South Korea rose from 640.3 billion won (US$556.7 million) to 750.4 billion won (US$652.5 million) between the end of last year and the end of the first half of 2016. Meanwhile, that of those investing in overseas markets fell from 55.8 billion won (US$48.5 million) to 46.4 billion won (US$40.3 million). The number of ETFs available in the domestic market increased by 27 to 220 in the first half. According to the Korea Exchange, the number of new entries is estimated to reach an all-time high of 70 or so this year.