KRX300 & Blockchain

Seoul

Every Korean issuer lists a KRX300 ETF at the same time…

Every major Korean ETF provider has listed a KRX300 tracking ETF at the same time. Each competitor has rolled out the same product tracking the same index, with the same inception dates.

The listings come two months after Korea Exchange unveiled the new KRX300 index. The new index came as part of a broader government-led initiative to drive up investment in Korean firms. As part of that effort, the government has told the KRX to relax rules on listings in order to boost the presence of startups and small companies on Korean exchanges.

On the investment side, the Korean government has brought in tax incentives for firms investing in smaller companies. The new listings are:

  • KB KBSTAR KRX300 ETF (292050)
  • HI FOCUS KRX300 ETF (292730)
  • Samsung KODEX KRX300 ETF (292190)
  • MIRAE ASSET TIGER KRX300 ETF (292160)
  • Hanwha ARIRANG KRX300 ETF (292750)

The only difference between these ETFs that we can see is that some are cheaper than others. At five basis points, the two cheapest are KBStar and Kodex’s funds. The most expensive is Mirae’s, which costs 16 bps.

Analysis – quick Korean primer

The Korean ETF market, like many other corners of the Korean economy, is dominated by the ‘chaebols’—giant business conglomerates that are the kingmakers in Korean politics. Of the above listed ETFs, all but Mirae’s is owned by a chaebol. (Samsung owns Kodex; Hanwha owns both Arirang and Hi Focus; Kookmin Bank owns KBStar) KRX is the only securities exchange in South Korea and has closer ties with the government than securities exchanges in the US.

Toronto

Canadian blockchain ETF

First Trust is listing its blockchain ETF on the Toronto Stock Exchange. The First Trust Indxx Innovative Transaction and Process ETF (BLCK) will track the Indxx Blockchain Index, much like its US-listed $27m counterpart (LEGR).