Exchange boasts Korean ETF market is among global top 10 and is ready to do more to expand it
A front view of the Korea Exchange.(photo: KRX)
The Korea Exchange (KRX) has been preparing to open a gold trading market to make the market more transparent, following the introduction of the Konex market in July to boost the Korean securities market.
KRX Securities Market Headquarters, in an effort to attract investments in exchange traded funds (ETFs), which grew large enough to be included among the global top 10 since its introduction, has published a guide book for investing in ETFs and has been providing the e-book free of charge.
KRX has continuously been providing services such as education to expand investments in ETFs.
When the securities-type funds showed a decline after 2009, the net assets of ETFs continued to grow, attracting diverse commodities and fund inflows. The situation showed that the ETF can be a replacement commodity for securities-type assets since it has a lower cost and easy convertibility, a huge advantage to investors.
KRX hosted a session for pension funds, organizations, and individual investors to boost the understanding of ETF products and explain the advantages associated with them as well as the asset management strategy. The ETF market, since its opening in 2002, saw its value expand to more than 15 trillion won with listed shares numbering 135 and its global position upgraded to be among the global top 10 markets.
A number of renowned securities agencies joined the ETF market including Kium Asset Management, Dongbu Asset Management, and Hana UBS Asset Management, along with 13 others already dealing with the market.
In order to boost the understanding of the ETF market, KRX plans to hold campaigns to explain the market including its future plans, along with education sessions for private banking customers on ETF investment. It also plans to expand the number of indirect investors, the connection among PB management firms, and the exchange among their networks. KRX plans to continue to provide consultations along with the tailor-made education services free of charge when requests are made.
Despite the global financial crisis, KRX continues to uphold its position as the fourth largest in Asia with $12.733 billion in its market value, following Japan’s $46.769 billion, Hong Kong’s $29.878 billion, and China’s $20.617 billion, growing 43 times since the introduction of the ETF market in 2002.
The number of shares listed on the ETF market numbered 135, with 29 listed in 2012, which is the largest in Asia, while Japan has 130, Hong Kong with 100, and Singapore with 99. (Sources: Deutsch Bank, ‘Weekly ETF Market Review’ Nov. 23, 2012).
Each ETF management firm operates its own booth to provide one on one consultation and provide a networking opportunity. Businesses and financial institutions use the KRX’s education services to the fullest extent possible.
KRX published textbooks on ETFs for investors who want to invest in ETF products. One version is in cartoon form intended for beginners and contains the content that investors must know. “The Story of ETFs for Beginners” contains the disciplines of ETFs and its advantages and investment methods shown in a cartoon-style story so that anyone can understand.
The text book for investors with a medium-degree of experience is titled, “Asset Management, It’s ETF Now,” and includes indexes for investment, the supply of liquidity, dividends, investment risks, taxes, and strategies for investments in ETF products, among others and provides vivid examples so that it can play the role of a bible for ETF investment.