ETF net assets jump by 3.8 trillion won a day in a hot market, edging closer to the 500 trillion won era

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[Financial News] The Korean ETF market is rapidly approaching the "500 trillion won era." With the stock market booming and leveraged products tied to Samsung Electronics Co., Ltd. and SK hynix set to launch on the 22nd, fund inflows are expected to accelerate further. Market watchers say net assets could surpass 500 trillion won as early as this month.
According to the Korea Exchange (KRX) on the 10th, total ETF net assets stood at 456.2392 trillion won as of the 7th. That is more than 50 trillion won higher in just about three weeks after breaking the 400 trillion won mark on the 15th of last month. Compared with the 7th of the previous month, the figure rose by 75.3601 trillion won. Based on 20 trading days, that works out to an average daily increase of about 376.8 billion won.
Since ETFs were launched in October 2002, the market surpassed 100 trillion won in net assets in June 2023, about 21 years later. It then broke the 200 trillion won mark in June last year. Seven months later, in January this year, it topped 300 trillion won, and it took just a little over three months to reach 400 trillion won.
Along with the stock market rally, the ETF market is growing quickly. Net assets rose by 69.0507 trillion won in last month alone, marking the largest monthly increase on record. That was about 35% higher than the previous peak monthly gain of 51.3173 trillion won in January. Last year, the average monthly increase was 10.298 trillion won.
Trading value is also surging. So far this month through the 7th, average daily trading value has reached 26.8746 trillion won, up by more than 10 trillion won from last month’s daily average of 16.5359 trillion won. On a monthly basis, average daily trading value first climbed above 10 trillion won in January at 14.4099 trillion won, and it has continued to rise steadily since then.
Brokerage analysts say that if this growth continues, ETF net assets could break the 500 trillion won mark as early as this month. They expect a virtuous cycle in which a strong domestic stock market draws more money into ETFs, supports the index, and then lifts ETF values as the index rises.
In particular, the launch of single-stock leveraged ETFs is expected to attract a large amount of capital. Eight asset managers, including Samsung Asset Management and Mirae Asset Global Investments Co., Ltd., are preparing leveraged ETF products based on Samsung Electronics Co., Ltd. and SK hynix, with a target launch date of the 22nd.
Jae-hong Yoon, a researcher at Mirae Asset Securities, said, "Applying the case of U.S. single-stock leveraged Exchange-Traded Products (ETPs), inflows into Samsung Electronics Co., Ltd. and SK hynix leveraged ETFs are estimated at 170 billion won under a conservative scenario and 530 billion won under an aggressive scenario." He added, "Given that funds tend to concentrate in the first five trading days after listing, short-term volatility could increase during the five trading days following the launch."
jisseo@fnnews.com Sumin Seo Reporter