KIM launches low-cost KOSDAQ 150 ETF on KRX

May 18th, 2020 | By | Category: Equities

Korea Investment Management (KIM) has launched a new ETF providing low-cost exposure to a portfolio of Korean technology companies.

Kim Kindex launches low-cost Kosdaq 150 ETF on KRX

The fund provides exposure to a tech-heavy portfolio of South Korean companies.

The KINDEX KOSDAQ 150 ETF (354500 KS) has listed on Korea Exchange (KRX) and comes with an expense ratio of just 0.10%.

The fund tracks the KOSDAQ 150 Index through direct physical replication.

The KOSDAQ 150 is composed of 150 stocks trading on KOSDAQ – an electronic trading platform within KRX that is favoured by tech firms – that have been selected in consideration of market representability, sector representability, and liquidity.

Roughly three-quarters of the index’s exposure is dedicated to the technology sector (including information technology, biology technology, and culture technology) with the remaining quarter spread out across materials, industrials, consumer discretionary and consumer staples.

The largest single firm exposure is to Celltrion Healthcare at 12.2%, followed by HLB (5.3%), and SEEGENE (2.8%).

KIM already offers the KOSDAQ (Synth) ETF (251890 KS) which utilizes a synthetic (or swap-based) index-replication approach and tracks the broader KOSDAQ index. This fund, however, is significantly less competitive, with an expense ratio of 0.30%, and has failed to generate notable AUM.

With a high correlation to the KOSDAQ, a lower fee, and a physical replication approach, KIM’s new KOSDAQ 150 offering would appear to be a better bet for investors.

It is also cheaper than rival products, including the KBStar KOSDAQ 150 ETF (270810 KS), the Mirae Asset Tiger KOSDAQ 150 ETF (232080 KS), and the Samsung Kodex KOSDAQ 150 ETF (229200 KS), which come with expense ratios ranging from 0.18% to 0.25%, and house between $200m and $450m AUM each.

(KIM previously offered the KOSDAQ 150 (Synth) ETF (227930 KS), but the fund was delisted.)

Tags: , , , ,

Leave a Comment