The South Korean exchange-traded fund (ETF) market is undergoing a rapid generational shift. As artificial intelligence (AI) and semiconductor-related products gain attention, some thematic ETFs focused on China, mobility, and biotechnology are disappearing from the market.
According to the Korea Exchange, 19 domestic ETFs have entered the delisting process from January 1 to August 10 this year. The delisted thematic products include those related to China, mobility, biotechnology, and consumer sectors, which once attracted investor interest.
Among the delisted ETFs are the KIWOOM China A50 Connect MSCI and 1Q China H(H), both related to China. Additionally, KIWOOM Global Future Mobility, KIWOOM Fn Gene Innovation Technology, and VITA MZ Consumer Active have also exited the market.
Notably, the KIWOOM China A50 Connect MSCI, KIWOOM Global Future Mobility, and KIWOOM Fn Gene Innovation Technology faced delisting procedures after their trust principal amounts remained below 5 billion won (approximately $4 million) for over a month. This indicates that as the ETF market expands, there is also a cleanup of products that have not attracted investor interest.
However, not all delisted ETFs can be attributed to a decline in investor demand. The list also includes maturity-type bond products such as ACE 26-06 Corporate Bonds (AA- or higher) Active and BNK 26-06 Special Bonds (AAA or higher) Active.
In contrast, AI, semiconductor, and information technology (IT) related products are standing out in this year's ETF market. Products like TIGER 200 IT Leverage, TIGER US Philadelphia Semiconductor Leverage (Synthetic), HANARO Fn K-Semiconductor, and RISE Network Infrastructure have ranked among the top performers since the beginning of the year. Expectations for growth in the AI industry are spreading to semiconductors and network infrastructure, increasing interest in related products.
Newly listed products are also highlighting the presence of AI themes. This year, FOCUS AI Semiconductor Weekly Fixed Covered Call, RISE US AI Power Infrastructure Active, and ACE K-Semiconductor TOP2+ have been newly listed.
A securities industry official stated, "Investor interest is rapidly shifting within the ETF market, leading to a generational change among products. From the perspective of asset management firms, it seems that there will be a continued restructuring where products with declining demand are phased out and new products that meet emerging investment needs are introduced."
* This article has been translated by AI.
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