On November 28 (local time) of last year, a BTS concert was held at Sofai Stadium in Los Angeles (LA), USA.  (Source = Yonhap News)
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US ETF containing Korean entertainment stock is coming out.. Will K-pop influence work in US stock market?

On November 28 (local time) of last year, a BTS concert was held at Sofai Stadium in Los Angeles (LA), USA. (Source = Yonhap News)

An exchange-traded fund (ETF) manager in the US plans to list for the first time a ‘KPOP (K-pop) ETF’ that tracks the stock price of Korean entertainment companies.

On April 23 (local time), Bloomberg News reported that ‘Exchange Traded Concepts (ETC)’, an ETF manager in the US, plans to list an ETF that tracks the stock price of Korean entertainment companies. According to the prospectus submitted by ETC, the name of the ETF traded on the US stock market was ‘KPOP’. ETC is an ETF manager headquartered in Oklahoma, US, with total assets under management of about $8.6 billion (10.7 trillion won) as of February 28.

The index to be followed by the KPOP ETF consists of listed companies related to music, movies, and dramas in Korea with a market capitalization of 100 billion won or more. CT Investment, a Korean content IP (intellectual property) company, is in charge of designing the index. If the ETF is approved by the US Securities and Exchange Commission (SEC), it will become the first ETF related to Korean popular music, and it is evaluated that K-pop influence will expand into the ETF market. It is expected to be listed on the European stock market in the future.

Bloomberg and Bloomberg Intelligence, a market data analysis company affiliated with Bloomberg, evaluates that “the KPOP ETF is a product aimed at a niche in the US ETF market, which boasts a size of $6.8 trillion (about 8455 trillion won).” However, he said, “The growing K-pop industry can be a valid investment factor, but it is difficult to assert the commercial appeal of this product,” he said.

Meanwhile, the current situation of domestic entertainment stocks is not very good. Domestic entertainment stocks showed a steady upward trend at the beginning of the year as expectations for re-opening such as the resumption of concerts were reflected, but they are stagnating when the ‘social distancing’ is implemented in earnest. SM’s stock price soared to 90,000 won in early April, but since then it has continued to decline and fell to 60,000 won, and JYP Ent. Nevertheless, most experts analyze that the stock price is adjusted according to anticipation, etc., and the mid- to long-term investment value of entertainment stocks is still high.

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Reference-www.mk.co.kr

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