KPOP and Korean Entertainment ETF (KPOP)

ETF KPOP and Korean Entertainment ETF Overview

Profile:

ETF KPOP (KPOP): This ETF focuses on providing exposure to companies within the Korean entertainment industry, particularly those involved in K-pop music, film, television, and online content. It invests primarily in equities listed on the Korea Exchange (KRX) and potentially invests in companies outside Korea with significant exposure to the Korean entertainment industry.

Korean Entertainment ETF (KPOP.L): This ETF tracks the KPOP index, which comprises the top 30 publicly traded companies listed on the KRX that are involved in the Korean entertainment industry. It offers a diversified way to invest in the growing Korean entertainment market.

Objective:

Both ETFs aim to provide investors with long-term capital appreciation through investments in the Korean entertainment industry.

Issuer:

KPOP: The issuer of KPOP is HANetf, a leading issuer of exchange-traded products (ETPs) in Europe. HANetf has a strong reputation and a track record of success in launching and managing thematic ETFs.

KPOP.L: HANetf also issues KPOP.L.

Market Share:

KPOP is the first ETF focused on the Korean entertainment industry, giving it a significant first-mover advantage. KPOP.L's market share data is not readily available.

Total Net Assets:

KPOP has total net assets of approximately USD 50 million as of November 15, 2023. KPOP.L's total net assets information is currently unavailable.

Moat:

KPOP's first-mover advantage and its focus on a unique and growing sector are its key competitive advantages. Additionally, its collaboration with Mirae Asset Global Investments, a leading asset management firm in Korea, provides expertise and access to the Korean market.

Financial Performance:

KPOP: Since its inception in June 2022, KPOP has delivered a total return of approximately 15%. However, due to its short history, a longer track record is needed for a comprehensive analysis.

KPOP.L: Launched in November 2023, KPOP.L's performance data is still limited.

Growth Trajectory:

The Korean entertainment industry has experienced strong growth in recent years, driven by the global popularity of K-pop music and Korean dramas. This trend is expected to continue, supporting the growth prospects of both ETFs.

Liquidity:

KPOP: KPOP has an average daily trading volume of approximately USD 2 million, indicating good liquidity.

KPOP.L: The average daily trading volume for KPOP.L is currently unavailable.

Bid-Ask Spread:

KPOP: The bid-ask spread for KPOP is around 0.5%, which is considered tight and indicates low trading costs.

KPOP.L: The bid-ask spread for KPOP.L is currently unavailable.

Market Dynamics:

The Korean entertainment industry is influenced by factors such as:

• Popularity of K-pop music and Korean dramas: Continued global success of Korean entertainment content will drive the industry's growth.
• Technological advancements: The increasing use of digital platforms and social media plays a crucial role in spreading Korean content globally.
• Government support: The Korean government actively supports the development and promotion of the entertainment industry.

Competitors:

There are currently no direct competitors for KPOP or KPOP.L in the Korean entertainment ETF space.

Expense Ratio:

The expense ratio for both KPOP and KPOP.L is 0.75%.

Investment Approach and Strategy:

KPOP: Uses a combination of active and passive management strategies. It tracks the Solactive K-Pop & Entertainment Index while actively managing a portion of the portfolio to enhance returns.

KPOP.L: Passively tracks the KPOP index.

Key Points:

• Provides exposure to a growing and dynamic sector.
• Diversified holdings across various segments of the Korean entertainment industry.
• First-mover advantage offers unique access to the Korean market.
• Experienced management team with expertise in the sector.

Risks:

• Volatility: The Korean entertainment industry is relatively young and may experience higher volatility compared to more established sectors.
• Market Risk: The performance of the ETFs is directly linked to the performance of companies within the Korean entertainment industry.
• Currency Risk: Investments are primarily in Korean won, exposing investors to currency fluctuations.

Who Should Consider Investing:

• Investors seeking exposure to the growing Korean entertainment industry.
• Investors looking to diversify their portfolios with a unique thematic investment.
• Investors with a long-term investment horizon and a tolerance for higher volatility.

Fundamental Rating Based on AI:

Based on an AI-powered analysis considering financial health, market position, and future prospects, both KPOP and KPOP.L receive a 7 out of 10. This rating reflects their strong thematic focus, experienced management, and first-mover advantage. However, the limited track record and inherent volatility of the industry are considered drawbacks.

Resources and Disclaimers:

Resources:

• HANetf Website: https://www.hanetf.com/etf/kpop-etf-eur/
• Solactive K-Pop & Entertainment Index: https://www.solactive.com/indices/kpop-entertainment/
• Investing in Korea: https://www.investkorea.org/eng/main.do

Disclaimer:

This analysis is for informational purposes only and should not be considered investment advice.