CT Investments has introduced the KPOP Korean Entertainment ETF on the NYSE Arca, an attempt to offer overseas investors exposure to South Korean culture. The ETF seeks to allocate 70-80% of its holdings to the entertainment industry, including music, film, and television, and 20-30% to interactive media and services, with stakes in companies such as Naver and Kakao. The index is rebalanced quarterly and has a total expense ratio of 0.75%.
Jangwon Lee, CEO of CT Investments, highlights the international success of K-Pop groups like BTS and Blackpink, and critically acclaimed productions like "Parasite" and "Squid Game," as evidence of ripe timing for such an investment. The ETF includes investments in Studio Dragon, Showbox, and Bucket Studio. The companies included in the ETF must have a market capitalization of at least 100 billion won ($73 million) and focus on nimbler firms rather than traditional South Korean conglomerates like Samsung.
However, some analysts express skepticism. Todd Rosenbluth, head of research at VettaFi, questions the investment case beyond making a portfolio "more fun," noting that investors typically associate South Korean equity exposure with multinational companies like Samsung Electronics or Hyundai Motor. Kenneth Lamont, a senior fund analyst at Morningstar, also points out that while thematic ETFs have seen growth, they tend to underperform, and niche products, by nature, focus on very specific, sometimes fleeting, themes. Despite this, Lee believes that international fans of South Korean culture will be interested in owning a piece of it, signaling a "contrarian bet" on the Korean equity market.
