The launch of a K-Pop ETF continues the Wall Street trend of offering super niche thematic fund strategies to investors

  • The launch of a K-Pop themed ETF will give investors exposure to South Korea’s entertainment industry.
  • The KPOP and Korean Entertainment ETF began trading on the New York Stock Exchange on Thursday.
  • The launch of the KPOP ETF continues a Wall Street trend of offering super-niche thematic investments to investors.

Bullish on the recent album drop of your favorite K-POP band? There’s an ETF for that.

It’s called the KPOP and Korean Entertainment ETF, and it’s a continuation of a Wall Street trend that seeks to offer super-niche thematic investment strategies to retail investors.

Launched by CT Investments, the KPOP ETF began trading on the New York Stock Exchange on Thursday under the ticker symbol “KPOP.” The ETF invests in Korea-exchange listed companies that operate in the entertainment and interactive media industry.

“K-pop, which has become a global keyword, has become part of mainstream culture for fans in Korea as well as around the world. We are launching this ETF to provide an opportunity for global fans who love K-pop to participate in the potential growth and development of the K-pop industry as well as investors access to Korea-listed companies that are driving the future of global content industry forward,” CT Investments CEO Jangwon Lee said.

Talking up the growth potential of South Korea’s entertainment industry, Lee highlighted that international sales of music records from Korean entertainment companies ballooned to $221 million in 2021 from just $24 million in 2012. 

The K-pop ETF is the latest example of funds being offered to investors that track a very specific investment theme. In recent years ETFs for everything from space travel (UFO), to meme stocks (MEME), to politically-minded investments (MAGA) have been launched, with varying degrees of success. 

“The global market for K-pop is still at an early stage of growth and the KPOP and Korean Entertainment ETF will offer thematic exposure to key companies in the Korean entertainment and media industry that stand to benefit from this secular trend,” Lee said.

The KPOP ETF owns 30 South Korean companies and counts HYBE Co., CJ ENM, and JYP Entertainment as its top three holdings. HYBE Co. is the agency that manages popular South Korean boy band BTS.

While the thematic ETF is chasing a growing trend in the entertainment industry, it will likely face an uphill battle in gaining traction with investors. Thematic ETFs have suffered from poor performance during the recent stock market rout, and the ETF’s annual expense ratio of 0.75% is not cheap. 

Inflows into thematic ETFs have plummeted this year, but the launch of the right ETF strategy at the right time can lead to big success, evidenced by the launch of a cybersecurity ETF amid a high profile hack of Sony in 2014. Now investor eyes might be on when the next album from BTS drops.

Leave a Reply

Your email address will not be published. Required fields are marked *