"Not Everyone Needs to Do Everything"... In the ETF 500 Trillion Won Era, Asset Managers' Specialization Is Back in Focus [Financial News]

[Financial News] As South Korea's exchange-traded fund (ETF) market has grown to the 500 trillion won range, the rules of competition in the asset management industry are changing as well. Moving away from the 'all-in-one' model in which a single firm handled stocks, bonds, ETFs and money market funds (MMFs), a specialization strategy that concentrates people and resources in areas of strength is regaining momentum.
According to the financial investment industry on the 31st, the recent restructuring by Korea Investment Management can also be seen as part of this trend.
Korea Investment Management will spin off its securities fund and MMF businesses from its collective investment operations and merge them into Korea Investment Value Asset Management through an absorption-type merger. The goal is to launch the new structure on Jan. 1, 2027.
On the surface, it is a transfer of business between affiliated asset managers, but the industry is focused on what comes next. Korea Investment Management will concentrate its capabilities on the passive segment, including ACE ETF, while Value Asset Management will absorb securities funds and strengthen its expertise in active management. Rather than one company trying to cover every strategy, each firm is drawing a clearer line of responsibility.
This is not the first attempt to divide an asset manager by strategy. In 2017, Samsung Asset Management separated its domestic equity active business into Samsung Active Asset Management, splitting its management system from passive businesses such as ETFs and index funds. Truston Asset Management has also pursued specialization by spinning off its hedge fund business into a separate entity.
However, industry observers say the market environment driving specialization is different now than it was 10 years ago.
Back then, the emphasis was largely on separating investment philosophies and performance-based compensation systems and strengthening each organization’s identity. Now, the rapidly growing ETF market is shaking up how asset managers allocate resources.
An industry official said, "Domestic ETF net assets surpassed 500 trillion won in the first half of this year. Alongside the two-way rivalry between Samsung Asset Management and Mirae Asset Global Investments, large firms such as KB, Korea Investment and Shinhan are competing for market share, while smaller managers are also entering the market with thematic and active ETFs," adding, "The question of where to concentrate product development, investment talent and marketing costs has become a key factor in determining market share."
Korea Investment Management also grew quickly on the back of ACE ETF, but competition has intensified as the overall market expanded even faster. That is why the restructuring is being viewed not simply as an effort to improve organizational efficiency, but as a move to concentrate management resources on core businesses, including ETFs.
Changes are also expected at Value Asset Management. Founded as a house specializing in value investing, it will broaden its scope into an active management platform by taking over securities funds and MMFs. Korea Investment Management's "streamlining" and Value Asset Management's "expansion" are happening at the same time.
Another industry official said, "As the ETF market has grown so quickly, it is no longer enough to explain competitiveness simply by offering a full range of products," adding, "Where a firm chooses to focus its products, personnel and marketing resources has become an important variable in asset managers' competitiveness."
The official added, "In the past, specialization was an experiment to make each firm's investment philosophy more distinct. Now, its character is becoming much more practical," and predicted, "As we enter the era of 500 trillion won in ETFs, the industry will increasingly emphasize the organizations and functions that each firm can do best."



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