Samsung Asset to List MSCI Korea Index-Backed Exchange-Trade Fund in 2012
Samsung Asset Management Co., South Korea’s biggest manager of exchange-traded funds, said it’s preparing to list a fund that tracks the MSCI Korea Index (MXKR) in Seoul next year for the first time in the nation.
The Seoul-based money manager aims to list as many as 10 new ETFs in 2012, including products backed by stock indices of Asian emerging markets such as China, Indonesia and India, Bae Jae Kyu, chief investment officer of the ETF division at Samsung, said in an interview at his Seoul office yesterday. The company is also considering setting up an ETF in the U.S. that tracks Korean stock gauges including the Kospi 200 Index (KOSPI2), he said.
ETFs are typically designed to mimic the performance of indexes. Unlike mutual funds, whose shares are priced once daily after the end of each trading session, ETFs are listed on an exchange where shares are bought and sold throughout the day like stocks. South Korea’s ETF market is forecast to triple by 2015, according to the nation’s bourse operator. Global ETF assets surged to $1.39 trillion as of October, from $74.3 billion in 2000, according to a report by BlackRock Inc.
“ETFs are definitely a hot trend now," Bae said. "Money flowed in there even during the market’s decline this year."
The MSCI Korea Index fell 6.9 percent this year through yesterday, compared with a 17 percent drop in the MSCI Emerging Markets Index and a 7.5 percent retreat in the MSCI World Index, a gauge of developed countries.
‘Bullish’ View
The value of ETF assets in South Korea, the fourth-biggest market for the products in Asia now, may triple to 30 trillion won ($27 billion) by 2015, according to Hwang Sung Yun, an executive director of the Kospi market division at Korea Exchange Inc. A total of 107 ETFs, valued at about 9.4 trillion won, are currently traded on the bourse, exchange data show.
‘‘We are bullish on the ETF market,’’ Hwang said in an interview at his Seoul office. ‘‘It will continue growing especially at a time when investors seek some simplicity amid uncertainties in the financial markets. More investments will come from pension funds going forward as well.’’
Samsung Asset is not alone in betting on the growth potential of ETFs. Mirae Asset Global Investments Co., South Korea’s second-largest money manager, agreed in July to buy the exchange-traded fund business of Jovian Capital Corp., a Canadian money manager.
To contact the reporters on this story: Saeromi Shin in Seoul at sshin15@bloomberg.net; Sungwoo Park in Seoul at spark47@bloomberg.net.
To contact the editors responsible for this story: Darren Boey at dboey@bloomberg.net; Richard Dobson at rdobson4@bloomberg.net
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