Mirae Asset closely chasing Samsung Asset with new products in ETF market

Samsung Asset and Mirae Asset logos [Courtesy of Samsung Asset Management and Mirae Asset]

Competition between Samsung Asset Management Co. and Mirae Asset Global Investments Co. mounting as the two leading asset managers vie for investors in the exchange-traded fund market even as economic uncertainties have driven the stock market lower.

South Korea’s ETF market is almost equally divided between KODEX products from Samsung Asset Management and TIGER products from Mirae Asset Global Investments. The combined market share of the two firms stood at 81 percent as of November this year.

Mirae Asset recently launched products suitable for investment amid economic downturns, such as interest rate products and dividend ETFs. The new products led to fresh capital inflows of more than 3 trillion won ($2.29 billion) in the second half of this year alone, narrowing the gap with its bigger rival Samsung Asset Management, which is a traditional powerhouse in the market.

In response, Samsung Asset Management plans to focus on long-term trend-type products, overseas products, and pension and bond-type products to attract and retain investors.

According to the Korea Exchange on Monday, the total net asset value of Samsung Asset Management stood at 34.67 trillion won as of November, accounting for 42.26 percent of the total market share, while Mirae Asset Global Investments had 31.94 trillion won, or 38.92 percent of the market. The difference between the two companies in the ETF market share narrowed to 3.34 percent, the smallest ever. The disparity which was widened by more than 10 percentage points two years ago, fell to a single digit in December of last year. After May, the gap was further narrowed to less than 5 percent.

While the stock market continued to decline this year following monetary tightening in major countries, Mirae Asset Global Investments raised its market share by launching new ETF products such as US S&P 500 Dividend Aristocrats and China Hang Seng Tech Leverage and US NASDAQ 100 Leverage.

In the second half of the year, the company attracted nearly 3 trillion won for its new ETF product TIGER CD Rate Investment KIS (Synth), further raising its market share. This is the first interest rate ETF that tracks the yield of 91-day certificates of deposit in Korea.

As of June, the total net asset of this product stood at about 450 billion won, but it grew to 3.4 trillion won in five months. It currently ranks second in terms of ETF net assets in Korea following Samsung Asset Management’s KODEX 200.

Samsung Asset Management is focusing more on bond-type products this year against Mirae Asset’s global theme products. Samsung Asset listed 21 ETFs this year, of which 10 are related to bonds. On the other hand, Mirae Asset focused on defending against market downturns with three theme products, four bond-type, and two dividend ETFs.