Single-stock leveraged and inverse exchange-traded funds (ETFs) based on Samsung Electronics and SK Hynix are set to launch at the end of this month. Major asset management firms are simultaneously introducing related products, intensifying fee competition in the ETF market.
According to the financial investment industry on May 15, eight asset management companies, including Samsung, Mirae Asset, Korea Investment, KB, Shinhan, Hanwha, Kiwoom, and Hana Asset Management, completed disclosures for 16 single-stock leveraged and inverse ETFs on May 14. The products are scheduled to be listed on May 27.
The upcoming ETFs include leveraged products that aim to double the daily stock price returns of Samsung Electronics and SK Hynix, as well as inverse ETFs that bet on a twofold decline in stock prices. This marks the introduction of high-risk, high-reward products based on leading semiconductor stocks in the domestic market.
With similar products launching simultaneously, asset managers are emphasizing fees as a key competitive factor. The total expense ratios for these new products have been set lower than the average annual fee of 0.44% for existing listed equity leveraged ETFs.
Mirae Asset Management has proposed the lowest fee, setting the total expense ratio for its TIGER ETF at 0.0901%. Korea Investment Trust Management's ACE ETF and Hana Asset Management's 1Q ETF have also joined the low-fee competition, each setting their fees at around 0.091%.
In contrast, the industry leader, Samsung Asset Management, has set the total expense ratio for its KODEX ETF at 0.29%, which is nearly three times higher than the lowest fee offerings. Market analysts suggest that Samsung Asset Management is opting for a strategy focused on profitability, leveraging its market share and brand strength.
The financial investment industry anticipates that the launch of these single-stock leveraged and inverse ETFs will intensify competition in the domestic ETF market. Given the recent optimism surrounding the semiconductor sector and increasing investor demand for Samsung Electronics and SK Hynix, interest in related ETFs is expected to grow.
* This article has been translated by AI.
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