Hanwha Asset Management Expands ETF Team to 8, Plans Active ETF Launch

Hanwha Asset Management ETF Strategy Team leader Lee Su-jin announced on the 20th the team's expansion from 5 to 8 members and plans to launch new active ETF products in the second half. Lee, who joined Hanwha Asset Management last month, leads the team responsible for 'PLUS' ETF research and active product management. The expansion aligns with the government's regulatory relaxation on 'fully active' ETFs, aimed at simplifying investor access to complex AI industry trends through single actively managed funds rather than multiple passive products. South Korea's ETF market has grown to nearly 500 trillion won in assets with over 1,100 listed products, creating increased demand for professional portfolio management that adapts to rapid capital flows across AI subsectors including semiconductors, power infrastructure, data centers, and cooling systems.

Hanwha Asset Management Expands ETF Team from 5 to 8 Members

In an interview with Yonhap Infomax on the 20th, Lee Su-jin stated the team will expand from 5 to 8 members in response to the government's regulatory relaxation on fully active ETFs. Lee joined Hanwha Asset Management last month to lead the ETF Strategy Team, which handles research and active product operations for the company's 'PLUS' ETF brand.

Lee Su-jin Defines Active ETFs as Tools Following Capital Flow

Lee described active ETFs as investment vehicles that track the flow of capital across industries. "Rather than purchasing multiple passive ETFs separately, covering the industry's 'mega trends' with a single active ETF is a true solution that reduces investor effort," Lee said. She explained that semiconductors may be strong at certain times, while software or infrastructure may lead the market at other periods. "If we capture these investment flows in active ETFs, investors can finish with one product instead of selecting multiple ETFs each time," Lee added.

Lee distinguished between passive and active ETF applications based on industry characteristics. "If a specific industry has high entry barriers and little change in the industry landscape, passive ETFs investing in core companies are suitable," Lee stated. "In contrast, in dynamic industries like AI where capital moves rapidly from semiconductors to power infrastructure, data centers, and cooling systems, active ETFs that adjust portfolios in a timely manner are much more advantageous to investors," she emphasized.

Hanwha Asset Management Prioritizes Investor Communication in Active ETF Management

Lee emphasized communication with investors in active ETF management. Hanwha Asset Management has been supplying research and analysis materials to investors and distributors in an environment overflowing with investment information. "While stock selection and management capabilities are important factors for active ETFs, communicating well with investors is also crucial," Lee said. "When volatility increases due to individual stock risks or overall industry changes, maintaining investor trust requires clearly conveying the reasons for asset inclusion and future rebound grounds from the manager's perspective," she added.

Lee Su-jin Focuses Product Development on Structural Growth Themes

Lee previously attracted attention in the ETF market with notable hit products. At her previous position at KB Asset Management, she led the planning of products including US dividend stocks, covered call ETFs, and bond hybrid ETFs. At Hanwha Asset Management, she plans to focus on discovering themes with high structural growth potential rather than developing short-term thematic products for simple market share expansion.

"I don't want to create products containing Samsung Electronics and SK Hynix that everyone thinks of when they say semiconductor investment," Lee stated. "Doing so can cause cannibalization with existing products," she said. "It's extremely interesting to deeply examine and productize structural growth themes that can generate long-term profits, such as global supply chain changes or industrial hegemony competition," she elaborated.

Government Pursues Regulatory Relaxation Removing Correlation Coefficient Requirements

The government is pursuing regulatory relaxation that does not apply correlation coefficient obligations to active ETFs, similar to major developed countries. Under current regulations, passive ETFs must maintain a correlation coefficient of at least 0.9 with the underlying index, while active ETFs must maintain 0.7 or higher. If index linkage regulations disappear, new competition is expected to open as each ETF differentiates its management strategy.

Lee anticipated that the market's early stage will require a process of resolving institutional challenges including front-running concerns due to the structure of disclosing portfolios (PDF) daily and the burden on liquidity providers (LPs) to present quotes. She expected the active ETF market to develop in a direction that expands managers' discretion while maintaining safeguards for investor protection, similar to US cases.

Hanwha Asset Management Operates 19 Active ETF Products Under PLUS Brand

Lee outlined plans to seize leadership in active ETF competition starting with new product launches in the second half in line with these changes. Hanwha Asset Management currently has 19 active lineups under the 'PLUS' brand. Recent products under management include 'PLUS K Manufacturing Core Companies Active,' 'PLUS Global Humanoid Robot Active,' and 'PLUS Global Copyright Core Companies Active.'

FAQ

What did Hanwha Asset Management announce on the 20th regarding its ETF team?

Hanwha Asset Management ETF Strategy Team leader Lee Su-jin announced on the 20th the team's expansion from 5 to 8 members and plans to launch new active ETF products in the second half. The expansion aligns with the government's regulatory relaxation on fully active ETFs.

Why does Lee Su-jin advocate for active ETFs in AI industry investing?

Lee stated that in dynamic industries like AI where capital moves rapidly from semiconductors to power infrastructure, data centers, and cooling systems, active ETFs that adjust portfolios in a timely manner are much more advantageous to investors compared to purchasing multiple passive ETFs separately.

What regulatory change is the government pursuing for active ETFs?

The government is pursuing regulatory relaxation that does not apply correlation coefficient obligations to active ETFs, similar to major developed countries. Current regulations require passive ETFs to maintain at least 0.9 correlation with the underlying index and active ETFs to maintain 0.7 or higher.