Korea's ETF market tops 1,000 listings, hits record W222tr in assets

Korea Herald

5 days ago

Samsung, Mirae Asset cement dominance amid market surge
The number of exchange-traded funds listed on South Korea's capital market has surpassed 1,000, marking a key milestone in the sector's 23-year history.
According to Korea Exchange data released Wednesday, the number of listed ETFs reached 1,002 as of Tuesday, up 15 percent from around 870 a year earlier.
Over the same period, the market's total net asset value surged 40 percent to 222 trillion won ($161 billion), crossing the 220 trillion won mark for the first time earlier this month.
When ETFs first launched in Korea in 2002, the market was slow to gain traction. A 2009 amendment to the Capital Markets Act allowed ETFs to expand beyond equities, paving the way for a broader range of products.
ETFs have made it easier for retail investors to access a wide range of asset classes — such as bonds, gold and crude oil — through real-time trading similar to stocks. They also offer exposure to diverse strategies, including leveraged ETFs that seek to deliver twice the daily return of an index, and inverse ETFs, which are designed to profit from market downturns.
Low fees and high transparency — since all holdings are publicly disclosed — have further fueled investor interest.
Growth has accelerated sharply in recent years. The number of listed ETFs has doubled since August 2021, when there were 500 products with 60 trillion won in assets. Assets under management have more than tripled, with volume doubling in just the past two years since surpassing 100 trillion won in June 2023.
Last month, average daily ETF trading volume rose to 5.25 trillion won, up nearly 60 percent from May's 3.33 trillion won and surpassing the 5 trillion won mark for the first time since January 2020.
The recent boom has been driven largely by retail investors seeking stable, low-cost investment options. Passive ETFs that track benchmark indexes account for more than 70 percent of all listed products, more than twice the number of active ETFs, which aim to outperform those benchmarks.
Growing interest in overseas markets — particularly the US — has also contributed to the surge. Nearly half of listed ETFs now track foreign equities, compared with just 30 percent in 2021.
By underlying asset, domestic equity ETFs make up the largest share at 38 percent, followed by overseas equity ETFs at 31 percent. Domestic bond ETFs account for 12 percent, while overseas bond ETFs represent 4 percent.
A recent wave of thematic ETFs has further broadened the market's appeal, with products targeting popular sectors such as defense, shipbuilding and nuclear energy, as well as ETFs structured around specific industry value chains. Of the roughly 90 ETFs launched this year, about 40 percent were such thematic products.
Samsung Asset Management, which pioneered ETF trading in Korea in 2002, remains the market leader with 85.5 trillion won in assets under management. While more than 20 firms offer ETFs, Samsung and runner-up Mirae Asset Management — at 75 trillion won in AUM — together dominate the market, commanding over 70 percent of the total share.