SEOUL– South Korea’s exchange traded fund (ETF) market has a high growth potential, the chief of a U.S. ETF-specializing asset manager said Wednesday
Christian Magoon, the CEO of the Chicago-based Amplify ETFs, noted the recent pandemic-incurred correction in the global financial market is helping investors better see the strength of ETFs over mutual funds.
An ETF refers to an investment fund that invests in a basket of assets, such as an index or commodities and bonds, providing retail investors and institutions with a more liquid and risk-hedging tool.
As of end-September, Amplify ETFs, among the top 30 ETF managers in the United States, had over US$3.3 billion in assets across a suite of core income and thematic ETFs.
“We have big ambitions for Asia, as well as the United States,” Magoon said in a press conference in Seoul, organized by Samsung Asset Management, Amplify’s Asian partner.
“In my initial assessment of the Korean ETF market, there were a lot of aggressive positioning and growth-centered strategies,” he said. “There was a larger appetite for buying debt and risk in product development.”
“However, we have been in the bull market for nearly 14 years, and now are facing our first (market) correction. I think more products that are defense-natured, focusing on value stocks and higher-quality companies, make sense as for the core investors’ portfolio.”
Magoon said Amplify ETFs seeks to introduce ETF model portfolios that focus on income.
“We expect to introduce some ETF model portfolios that combine different types of our income ETFs for a diversified model portfolio that has very attractive yields,” Magoon said.
Samsung Asset Management and Amplify ETFs have cooperated in multiple products, ever since they signed a strategic partnership in April.
Magoon also said both the U.S. and the Asian ETF investors need to keep their eyes open for competitive overseas ETF products.
“U.S. investors own too much U.S. stocks because they are most comfortable with them. We need more Korean stocks and Asian stocks that we can add (to their portfolios) from the diversification and exposure standpoint, and vice versa,” he said.
The South Korean asset manager listed the localized version of Amplify’s US-hits Amplify CWP Enhanced Dividend Income ETF (DIVO ETF) in South Korea.
Samsung Asset Management also listed Asia’s first Samsung Blockchain Technologies ETF on the Hong Kong bourse in July. It launched the Samsung KODEX US Dividend Premium S&P Active ETF on the Seoul bourse in September.
Source: Yonhap News Agency