Exchanged-traded fund, or ETF, is considered one of the most innovative financial products in the 21st century because it enables the efficient investment achievable through low costs. Samsung Asset Management has emerged as the representative ETF provider in Korea since it introduced the first ETF, namely the KODEX 200, in October 2002. Today, Samsung Asset Management manages 28 ETFs with a total AUM of \7.7trn.

The ETF Division of Samsung Asset Management has been upgrading its managerial capabilities through steady exchanges with various organizations based on the knowhow accumulated via the long-term management of index funds. It is able to utilize the BARRA Risk Model in any market of the world. In conclusion, the firm is yielding excellent outcomes in fund management through a combination of optimum hardware and the software of excellent human resources.

Samsung Asset Management has been making strenuous efforts to expand the basis of ETFs. It set up its ETF Planning Team, a first in the industry, which is in charge of ETF product development and research. Samsung AMC has also been carrying out education on ETFs for institutional and retail investors as well as ETF distributors.

Celebrating the 10th anniversary of the launching of the KODEX 200 on October 8th, Samsung Asset Management’s ETF Division has set the target to become one of Asia’s top 3 fund management firm with AUM of \15trn by 2015. Toward that end, the company has announced plans to establish an ETF market place and active advancement into overseas markets. 

To move toward that goal, the firm is seeking to introduce a lineup of products in accordance with assets to enable all kinds of investments through ETFs. It is poised to establish an ETF marketplace through the development of products like stocks, bonds, commodities, and foreign currency ETFs. 

Add to that, the firm is also seeking to compensate the domestic market by developing overseas ETFs and is ready to come up with profitable products with moderate risk that can increase the utilization of ETFs for institutional investors and pension funds. 

KODEX ETFs are expected to see a huge leap forward to maximize investor profits and explore various items through low-cost fund management at this time when the investor profit expectancy has been lowered given the lingering financial crisis in Europe and slowing economic growth in China. 

OUTCOMES OF KODEX ETF 

ETFs have a high degree of efficiency and transparency as it is an index fund tracking indexes with specific conditions. But it requires various products to raise investment efficiency. Samsung Asset Management has been providing investors with the environment to diversify a portfolio by steadfastly developing and offering revolutionary products like the KODEX China H ETF (the first overseas ETF listed in the domestic market), KODEX Leverage, and KODEX Inverse, since it first listed the flagship KODEX 200 ETF. 

The firm is also playing a leading role in helping other AMCs to enter the ETF market. Toward this end, it has been focusing on establishing an accounting and repurchasing system, an NAV system for real time quotes in the real market, a repo system for the smooth operation of ETFs, an AP/LP system to increase the liquidity, the joint-development of indices for the development of various ETFs, and the setup of a platform for the provision of outstanding overseas index data.

Samsung Asset Management has also been making steady investments toward the globalization of KODEX. It paved the way for the domestic funds to advance into global markets, with the KODEX200 ETF being listed on the Tokyo Exchange in 2007 for the first time among domestic funds. It first exported the financial know-how by taking part as the advising firm for the launch of the first ETF in Thailand.