Some major U.S.-based issuers of exchange traded funds are looking to increase their global footprints and are expected to list some well-known ETFs in South Korea.
“The Korea Exchange said Monday that it will seek to lure overseas exchange traded funds (ETFs) into the local stock market in order to meet rising demand for overseas direct investment by locals,” reports the Korea Times.
Well-known U.S. ETFs that could be listed in South Korea include the SPDR Gold Shares (NYSEArca: GLD) and the iShares Silver Trust (NYSEArca: SLV), according to the report.
U.S. ETF issuers could “also list various types of ETFs tracking foreign currencies and Treasuries, such as the Chinese yuan and Japanese yen, on the local stock market,” notes the Korea Times.
U.S. ETF issuers listing products in other countries as a means of generating asset growth is not uncommon. For example, WisdomTree (NasdaqGS: WETF), the fifth-largest U.S. sponsor of exchange traded funds, has a significant footprint in Latin America, among other regions. Last year, Mexico’s pension funds investment regulator, La Comisión Nacional del Sistema de Ahorro para el Retiro (CONSAR), approved six WisdomTree ETFs for sale to Mexican pension plans. [WisdomTree Grows in Latin America]
“Since being launched in 2002, South Korea’s ETF market has sharply drawn investors seeking safer investment vehicles, with assets under management skyrocketing to 20.7 trillion won ($17.5 billion) as of end-September from 300 billion won,” according to the Korea Times.
In the first eight months of 2015 record levels of net new assets have been gathered by ETFs/ETPs listed globally, with net inflows of US$219.7 Bn marking a 16% increase over the prior record set during the first eight months of 2014. In the United States net inflows reached US$127.5 Bn, which is 19% higher than the prior record set last year, while in Europe year to date (YTD) net inflows climbed to US$59.7 Bn, representing a 17% increase on the record set YTD through end of August 2014. In Japan, YTD net inflows were up 74% on the record set last year, standing at US$28.9 Bn at the end of August 2015,” according to ETF research firm ETFGI.
South Korea is Asia’s fourth-largest economy.
Tom Lydon’s clients own shares of GLD.