The K-Pop Exchange Traded Fund (ETF), which tracks the stock price of the Korean entertainment industry, goes up on the US stock market on the 1st (local time). It is the first ETF listed in the US focusing on the Korean pop music industry.
Contents Technologies (CT), an investment company in the content sector, will list the ‘K-Pop and Korea Entertainment Exchange Traded Fund’ on the US trading platform Arca on the New York Stock Exchange on the same day as ‘KPOP’ under the ticker. It is an ETF managed according to the KPOP index created by CT Investment, a subsidiary of CT. The KPOP Index includes 30 media companies listed on domestic exchanges, such as BTS and HYBE, which is home to top global idol groups, including BTS and the new girl group New Jeans, and SM YG JYP. Bloomberg News reported that entertainment agencies account for 70-80% of the total, likely to be much higher than other companies.
The KPOP Index selects companies using its artificial intelligence (AI) algorithm based on natural language processing technology. It is said that AI reads and judges whether each company is doing K-pop-related business by reading the company descriptions published online.
CT CEO Lee Jang-won explained, “The KPOP ETF is designed for investors who trust the Korean entertainment business.” The big four domestic entertainment agencies, such as Hive, SM YG, and JYP, have shown relatively stable sales and stock prices this year. Hive recorded record-high quarterly earnings in the second quarter (April to June), and SM and JYP YG’s stock prices are continuing to rebound thanks to the resumption of concerts and the release of new albums.
The outlook for KPOP ETF performance is mixed. “The target market is very narrow, so there is a risk that only ‘individual fans’ (not investors) will remain,” said Henry Jim, an analyst at Bloomberg Intelligence.