TIGER KEDI30 sells out initial net assets on first trading day

Korean individual investors injected 9.5 billion won ($7.9 million) in TIGER KEDI Innovator ESG30 ETF on Feb 8, an exchange-traded fund (ETF) tracking The Korea Economic Daily’s market index KEDI30.

The ETF, managed by South Korea’s Mirae Asset Global Investments Co., closed at 10,080 won ($8.4) with a 0.25% rise from its net asset value on its market debut day. The return rate was above the main bourse Kospi’s 0.05% and the secondary bourse Kosdaq’s negative 0.46%. A total of 1.49 million stocks worth 15.1 billion won (12.6 million) were traded on Tuesday.

The 9.5 billion won net purchase by individuals, on the market debut day, is the second-largest-ever equity ETF trading amount in Korea, except leveraged ETFs and inverse ETFs. Mirae Asset’s TIGER KRX BBIG K-New Deal, which debuted in October 2020, received a net 22.5 billion won from Korean individual investors on the first day of trading. The BBIG ETF garnered market attention by its theme stocks bio, battery, internet and gaming at the time. Given the recent share price adjustments, TIGER KEDI30 ETF attracted huge interest from domestic investors, analysts say.    

Including leveraged ETFs and inverse ETFs, TIGER KEDI30’s net sale on the first day ranks 10th place. The record-high ETF is Samsung Asset Management Co.’s KODEX China H, which debuted in October 2007 and sold 33.1 billion won to individual investors on the first trading day. 

TIGER KEDI30’s initial net asset value is 10 billion won. A total of 11 billion won worth of stocks were sold including institutional investors’ purchases, an official from Mirae Asset said. The asset management giant plans to issue additional ETFs worth 7 billion won, the official added. 

THE ONLY DOMESTIC EQUITY ETF IN THE TOP FIVE

Including leveraged ETFs and inverse ETFs, TIGER KEDI30’s net sale to individual investors ranked third place on Tuesday. Mirae Asset’s TIGER China Electric Vehicle Solactive ETF sold 44 billion won to individual investors, followed by Samsung’s KODEX 200 Futures Inverse 2X’s 43.6 billion won. In fourth place was Samsung’s KODEX Kosdaq 150 Futures Inverse, which sold 7.8 billion won, followed by Mirae Asset’s TIGER US Nasdaq 100’s 5.4 billion won. TIGER KEDI30 was the only domestic equity ETF in the top five.   

KEDI30 reflects both business leaders’ views on the market and environmental, social and governance of companies. The Korea Economic Daily and market research firm Ipsos Group have jointly conducted surveys for 100 chief executives of corporates and another 30 CEOs of asset managers in Korea to select the country’s top 50 innovative companies. Then, the news outlet chooses 30 out of the 50 firms using an ESG assessment model, which The Korea Economic Daily has co-developed with Yonsei University and IBS Consulting Company. 

The Korea Economic daily changes stocks on the index every year, based on the survey and ESG assessment modeling. The news outlet makes a stock change if there are ESG issues with companies. On Jan. 24, the index excluded LG Chem Ltd. as the Korean chemical company was criticized by its investors – after LG Chem spun off LG Energy Solution Ltd. and announced the plan for listing the battery maker last year, the chemical companies’ stock nosedived. The KEDI30’s index committee determined to remove LG Chem given the ESG issue.

“Many investors have hesitated to bet on domestic stocks due to continuous ESG issues, such as spin-off, embezzlement and intra-group trading. TIGER KEDI30 lists ‘good innovators’ of Korea, which investors can trust for the long term,” said Kim Nam-ki, head of ETF management at Mirae Asset Global Investments.

POTENTIAL OF 53% SHARE PRICE HIKE

The average stock prices of the 30 firms on TIGER KEDI30 have soared 190% during the past five years. It is more than the fourfold increase of Kospi’s 47% rise during the same period.

The 30 companies are expected to record 806.9 trillion won worth of sales this year, according to financial information provider FnGuide Inc. It is a 20.5% increase from the last year, as well as above 13.2% of 274 Korean listed firms’ sales in 2022 forecast by Korean securities firms.

The operating profits of the 30 companies will rise by 38.2% this year, almost doubling the 22.4% of the 274 listed companies. FnGuide estimated the average target price of KEDI30 companies' stocks to be 52.8% higher than current average prices, which means the stocks still have a lot of potential for a massive hike. 

Write to Tae-Hoon Lee and Sul-Gi Lee at beje@hankyung.com
Jihyun Kim edited this article.