South Korean ETF Companies Expanding Their Business Abroad

On October 11, Mirae Asset Global Investments listed four leveraged and inverse ETFs tracking the S&P and TOPIX indices on the Hong Kong Stock Exchange. This is to take the lead in the fledgling leveraged and inverse ETF markets in the local stock exchange that began to be formed in February this year.

The number of Mirae Asset Global Investments’ ETFs listed abroad has increased to 120. The company is currently running a total of 80 ETFs in South Korea, second to none in the country. Since its acquisition of Horizon ETFs, the largest ETF company in Canada, in 2011, Mirae Asset Global Investments has expanded its business to North America, Hong Kong, Australia and Colombia.

Samsung Asset Management started its overseas business in November 2007 by cross-listing its KODEX 200 ETF in Tokyo. This company has released a series of niche products since last year, including the first leveraged, inverse and crude oil ETFs on the Hong Kong Stock Exchange. Its crude oil ETF has recorded an average daily trading volume of more than 160,000 shares.

Korea Investment Management, in the meantime, listed the AdvisorShares active ETF on the New York Stock Exchange on September 29. It is the only active ETF investing in South Korea in that stock exchange.

At present, the size of the global ETF market is as large as US$3 trillion and the South Korean ETF companies’ total value under management stands at approximately 30 trillion won (US$27 billion). Nevertheless, overseas ETF markets are an Eldorado for them with an increasing number of investors preferring ETFs to funds in general. These days, American and European pension funds are investing aggressively in ETFs unlike South Korean pension funds, too.