[Financial News] Over 1 trillion won was rapidly invested in a newly listed KOSDAQ active exchange-traded fund (ETF) last week. Unlike existing passive ETFs that track the KOSDAQ 150 index, the introduction of an active strategy where management directly selects individual stocks raises the possibility of changes in the supply and demand structure of the KOSDAQ market.
According to KOSCOM’s ETFCHECK on the 15th, the top two ETFs for net purchases by individuals over the past week were Samsung Active Asset Management’s ‘KoAct KOSDAQ Active’ and Timefolio Asset Management’s ‘TIME KOSDAQ Active’. From the time the two products were simultaneously listed on the 10th to the 13th, net individual purchases amounted to 731.4 billion won for ‘KoAct KOSDAQ Active’ and 368.9 billion won for ‘TIME KOSDAQ Active’. In less than a week since their listing, more than 1 trillion won in individual funds flowed into these products, rapidly expanding investor interest.
The securities industry is paying attention to the possibility that funds invested in KOSDAQ active ETFs will lead to individual stock inflows. Since active ETFs incorporate stocks selected directly by the management company, inflowing funds could expand the buying trend around the incorporated stocks.
Jin-Young Kim, a researcher at Kiwoom Securities, said that “Liquidity providers (LPs) may buy physical baskets to hedge ETF sales,” adding that “a tendency for high stock price returns is observed in stocks with concentrated net investments from financial investors.”
In fact, during the initial period after listing, some incorporated stocks showed an increase in trading volume and stock prices. Particularly, previously neglected stocks such as Qurient and Sung Ho Electronics, which did not have analyst estimates, recorded returns of 25-28% on the day of listing due to their high proportion in the ETF.
However, the two ETFs display distinct operational strategies. The ‘KoAct KOSDAQ Active’ is based on a bottom-up strategy that selects small and medium-sized companies with high growth potential without being limited to the KOSDAQ 150. In contrast, the ‘TIME KOSDAQ Active’ adjusts sector allocation considering policy environment and performance momentum. Observers predict that differences in stock selection and portfolio structure will lead to varying performances between the two KOSDAQ active ETFs.
The market is also focusing on the possibility that the introduction of KOSDAQ active ETFs could change the supply and demand structure of the KOSDAQ market. While existing KOSDAQ ETF funds were concentrated on large-cap stocks in the KOSDAQ 150, active ETFs can select their investment targets among all KOSDAQ stocks. As a result, the flow of funds may extend to small and mid-cap growth stocks, strengthening the trend of individual stock performance in the KOSDAQ market.
Furthermore, policy benefits such as the government’s ‘KOSDAQ Market Trust and Innovation Improvement Plan’ and the launch of the 150 trillion won National Growth Fund are expected to amplify the anticipation of revitalizing the KOSDAQ market through active ETFs for the foreseeable future.
In-sik Kim, a researcher at IBK Investment & Securities, stated, “Due to the characteristics of the KOSDAQ market, ETF fund inflows can directly impact the supply and demand of individual stocks, making them potential targets for follow-up trading by institutions and ETF funds.” He added, “If the performance differences of the two ETFs are recurrently confirmed through such stock selections, the KOSDAQ market could transition from an index-centered trend to an expansion of individual stock differentiation.”