Major Korean asset managers maintained solid earnings in the first quarter despite a sharp increase in marketing expenses, as competition intensifies in the rapidly expanding exchange-traded fund (ETF) market.
With Korea's ETF market expanding by approximately 180 trillion won this year alone to reach a record high, asset managers are aggressively expanding their advertising across television, buses and baseball stadiums to secure brand competitiveness. Industry observers say the brand recognition battle among asset managers is becoming increasingly fierce as retail investor capital rapidly flows into the ETF market.
According to business reports from each company on Tuesday, the combined first-quarter operating profit of eight major ETF managers — Samsung Asset Management, Mirae Asset Global Investments, Korea Investment Management, KB Asset Management, Shinhan Asset Management, Hanwha Asset Management, NH-Amundi Asset Management and Kiwoom Asset Management — totaled approximately 398.7 billion won, while combined advertising expenses reached about 11.1 billion won. Analysts say aggressive brand marketing is being led by asset managers with top ETF market share.
Domestic ETF net assets swelled to 478.43 trillion won by mid-month, raising expectations that the market will surpass 500 trillion won within the first half of the year. The market grew by more than 70 trillion won in about a month after first crossing the 400 trillion won mark on the 15th of last month. As the market rapidly expands, market share competition among asset managers is heating up.
Samsung Asset Management, the top ETF market share holder, posted first-quarter operating profit of 74.15 billion won and advertising expenses of 4.01 billion won. The company is seen as having maintained stable profitability while expanding TV and outdoor advertising under its KODEX brand amid the rally in Korean equities.
Mirae Asset Global Investments, ranked second, posted operating profit of 89.39 billion won, the highest among the surveyed firms. Its advertising spending of 4.54 billion won was also the largest. The earnings improvement is attributed to higher fund fees driven by growth in fund assets under custody, along with the expansion of overseas subsidiaries in the U.S. and Hong Kong.
Mid-tier players, by contrast, are pursuing relatively efficiency-focused strategies. Korea Investment Management recorded first-quarter operating profit of 24.59 billion won and advertising expenses of 684 million won. KB Asset Management posted operating profit of 47.05 billion won and advertising expenses of 719.7 million won.
Within the asset management industry, competition is intensifying not only in TV advertising and YouTube content but also in offline advertising, including city buses, subways and professional baseball stadiums. As the ETF market is being reshaped around retail investors, brand exposure itself has become a competitive edge in attracting capital. Recently, asset managers have increasingly used everyday-life advertising channels — such as professional baseball broadcasts, stadium electronic billboards and buses — to repeatedly expose their ETF brands.
Single-stock leveraged and inverse ETFs, scheduled to launch on the 27th of this month, are expected to further intensify marketing competition among asset managers. Samsung Asset Management and Mirae Asset Global Investments have already begun competing to secure retail customers by holding pre-launch education and certification events.
Industry watchers say competition in the ETF market is spreading beyond simple performance rivalry into brand competition. "ETFs are closer to consumer goods than financial products," an industry official said. "Ultimately, how familiarly you expose your brand to investors is becoming the competitive edge."
