An exchange-traded fund (ETF) dedicated to investments in K-pop entertainment companies, key drivers of the ‘K’ craze, is set to launch in South Korea.
Korea Investment Management (KIM) is gearing up to introduce the ACE KPOP Focus ETF (Focus ETF), which will exclusively feature and invest in Korean entertainment companies. This announcement by the financial investment industry on Jan. 21 indicates that the ETF could be listed as soon as this month.
Previously, ETFs like TIGER Media Contents, KODEX Media & Entertainment, and HANARO Fn K-POP & Media have featured K-pop themes. However, the Focus ETF will be the first to encompass domestic entertainment agencies solely.
Initially, the Focus ETF will allocate 95 percent of its assets to the top four Korean entertainment companies, including HYBE, SM Entertainment, YG Entertainment, and JYP Entertainment. Each company is expected to weigh 18-25 percent in the ETF.
The remaining 5 percent will comprise stocks linked to the K-pop industry, including Cube Entertainment, which manages the girl group (G)I-dle, and Dear U, a platform owned by SM Entertainment.
This approach contrasts with other K-pop-themed ETFs that have included not just entertainment agencies but also webtoon platforms, drama production companies, and movie distributors. These ETFs have a cap of 40 percent for stocks directly related to K-pop.
KIM’s decision to roll out an ETF focused on K-pop agencies stems from the global popularity and growth of the K-pop industry, making these agencies increasingly attractive for investment.
KIM commented, “The combined revenue of these four major agencies has increased by an average of 35 percent over the last three years. We anticipate this growth trend to persist into the current year. The recent dip in stock prices is viewed as a temporary setback.”
