ETF market grows rapidly, now 50 trillion won in size

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ETF market grows rapidly, now 50 trillion won in size

Korea’s exchange traded fund (ETF) market posted solid growth last year, with net assets of ETFs breaking 50 trillion won ($42.9 billion) for the first time, Korea Exchange (KRX) said Tuesday. The net asset value of the country’s ETFs increased 26.1 percent last year from a year earlier to 51.7 trillion won, according to the exchange.

Representing a basket of stocks that reflect an index, an ETF can be traded on stock exchanges, allowing more flexibility in making investments and leeway for risk hedging. Korea launched the ETF market in 2002. The Kospi advanced 7.67 percent last year, according to the Korea Exchange. Kodex 200 had the highest net asset value, at 9.33 trillion won, accounting for about 18 percent of the total. During the one-year period, a net 6.7 trillion won in cash was funneled into the ETFs, the KRX said. The daily turnover fell 8.8 percent on-year to 1.33 trillion won last year.

The fall was relatively moderate compared to the 23.8 percent on-year dip in the trading volume of Kospi stocks. The net asset value of ETFs accounted for 2.8 percent of the total capitalization of the local stock market, up 0.2 percentage points on-year, the KRX said.

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