An exchange-traded fund (ETF) that tracks the stock prices of Korean entertainment companies, the so-called ‘KPOP ETF’, will be launched in the United States for the first time.
Bloomberg News reported on the 23rd (local time) that ‘Exchange Traded Concepts (ETC), an American EFT manager, plans to list an ETF that tracks the stock prices of Korean entertainment companies. If the ETF is approved by the U.S. Securities and Exchange Commission (SEC), it will become the first ETF related to Korean pop culture to be listed on the U.S. stock market.
According to the initial investment prospectus submitted by ETC, the trading item name of the ETF is ‘KPOP’. The index to be tracked consists of listed companies related to Korean music, film, and drama with a market capitalization of 100 billion won or more. The index was designed by C.T. Investment, a subsidiary of Content Technologies, a Korean intellectual property (I.P.) company. The K-Pop ETF plans to invest at least 80% of its net assets in stocks included in the index.
Bloomberg evaluated the launch of the ETF as an attempt to find a niche in the US ETF market, which boasts a size of $6.8 trillion. Henry Jim, an analyst at market analysis firm Bloomberg Intelligence, said, “Although investment in K-pop has been increasing recently, it is difficult to say whether K-pop-related ETF products will have commercial appeal. It seems to be an attempt,” he said.
ETC is an ETF management company headquartered in Oklahoma, USA. As of February 28, total assets under management were approximately $8.6 billion (10.7 trillion won).
Meanwhile, stock prices of entertainment companies representing domestic K-pop have shown a steady upward trend for about three months from the beginning of the year, with expectations that concerts will be resumed when the corona subsides. It’s a close look. In the case of S.M., the stock price rose by 65% for about three months from the end of January and soared to 90,000 won at the beginning of this month. JYP Ent. Also, it doubled from 37,600 won at the end of January to 66,200 won this month, renewing the new price, but it has now fallen to 57,600 won, about 13% from its peak. Most experts analyze that it is another stock price adjustment, such as anticipation, and research that entertainment stocks’ mid-to-long-term investment value is still high.