[News Article] Mirae Asset to introduce Asia’s first equal-weight ETF tracking S&P-500
Mirae Asset to
introduce Asia’s first equal-weight ETF tracking S&P-500 By
Im Eun-byel, The Korea Herald - Mirae Asset Global Investments, a leading asset
manager here, is to launch an equal-weight exchange-traded fund, suggesting a
well-balanced investment strategy to its investors. Mirae
Asset’s Tiger US S&P-500 Equal Weight ETF is to be listed on the Korea
Exchange, the country’s sole bourse operator, Tuesday. As its name suggests,
the ETF product equally tracks the stocks of 500 leading companies listed on
the S&P-500 index. While
most ETF products have their constituent stocks weighed depending on their
market caps, an equal-weight scheme assigns the same weight to all its
underlying stocks, regardless of their market capitalization. “It
is the first equal-weight ETF that tracks S&P-500 to be introduced in
Asia,” Mirae Asset Global Investments Chief Officer Nathan Nam-ki Kim, head of
the ETF management business unit, said at a press event held in central Seoul,
Friday. “Considering
how the index manager Dow Jones usually operates, it is likely to be the only
equal-weighted ETF tracking the S&P 500 in Korea for a while,” Kim said. The
asset manager explained the upcoming ETF product focuses on balanced
investment, with an aim to ride on the growth of leading US shares while
hedging losses. The product can help investors shift risks at times of high
volatility, as when big-name US tech stocks have shed losses in recent days. “Though
the concept of an equal-weighted ETF may be unfamiliar, the products were very
popular in the US last year,” said Kim Nam-ho, head of the fixed income,
currency, commodity ETF management division, referring to the Invesco S&P
500 Equal Weight ETF that attracted a net inflow of $12.9 billion last year. “Unlike
other equal-weighted ETF products, Tiger US S&P-500 Equal Weight ETF is to
rebalance its portfolio every quarter, maximizing the 'buy low, sell high'
strategy." He
further suggested investors balance out their portfolios by allocating 70
percent of their investments in market-weight ETFs and 30 percent in
equal-weight ETFs. The
incoming product is to boast the largest size among the ETF products here
staked to the S&P-500 index, at 100 billion won ($72 million), the asset
manager explained. "Previously,
small and midsized stocks generated larger gains than big shares at times of a
rate-cut cycle. With a pending rate cut (from the US Federal Reserve), an
equal-weight ETF could perform better," he said. Source:
https://www.koreaherald.com/view.php?ud=20240719050569
2024.07.23
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