Mirae Asset Debuts Japan ETF Investing Half Its Assets in Samsung, SK Hynix

'Global X Korea Semiconductor Top 10' Lists, Expanding Wealth Management Business

Samsung Electronics 25% and SK Hynix 25%

Product Holds Eight Top Materials, Parts and Equipment Companies

Mirae Asset Pursues Acquisition of a Local Brokerage

Deal Could Secure Financial License Faster

An exchange-traded fund holding Samsung Electronics and SK Hynix has listed in Japan, giving Mirae Asset Group a bridge to channel money from Japanese retail investors into South Korean chipmakers. Mirae Asset, which is speeding up efforts to acquire a Japanese brokerage, plans to use the ETF to target the fast-growing new NISA market, Japan's tax-exempt small-investment program.

Japanese Interest in Korean Chip Stocks Surges

On Sept. 9, Global X Japan's Global X Korea Semiconductor Top 10 ETF listed on the Tokyo Stock Exchange, according to Japan Exchange Group. The Tokyo Stock Exchange approved the new listing on Aug. 20.

The ETF tracks the yen-converted FnGuide Semiconductor TOP10 Index, which is made up of 10 South Korean semiconductor companies. Samsung Electronics and SK Hynix each account for 25% of the fund, meaning half of the portfolio is invested in the two companies. The remaining 50% is allocated to eight leading companies in semiconductor manufacturing equipment and materials and parts.

Japanese investor interest in Korean chip stocks has climbed sharply as growth in the artificial intelligence industry boosts demand for memory semiconductors such as high-bandwidth memory, or HBM. Yugo Tsuboi, chief researcher at Daiwa Securities, said Japanese media have been giving prominent coverage to the earnings of South Korean semiconductor companies, broadening their exposure among retail investors.

Global X Japan was established in 2019 as a joint venture between Global X, the U.S. ETF manager acquired by Mirae Asset Global Investments in 2018, and Japan's Daiwa Securities Group. Global X holds 50%, while Daiwa Asset Management and Daiwa Securities Group own 40% and 10%, respectively. Through the venture, Mirae Asset has been expanding ETF offerings in Japan tied to U.S. technology stocks, Japanese semiconductors, high-dividend shares and covered-call strategies.

Combining ETF Products With a Local Brokerage Sales Network

Mirae Asset Group's push to acquire a Japanese brokerage is closely linked to that ETF business. According to Japan's financial industry, the group has identified one brokerage as its acquisition target and is now conducting a legal review. Chairman Park Hyeon-joo is leading the effort.

Launching a securities business from scratch in Japan takes substantial time because it requires regulatory approvals, system buildouts and customer acquisition. Buying an existing brokerage would allow Mirae Asset to secure a financial instruments business license, a client base and a sales network in one step, shortening the time needed to enter the market.

Mirae Asset's competitive strengths are its global ETF product-development capabilities and wealth management expertise. Its Global X NASDAQ100 Daily Covered Call ETF surpassed 50 billion yen in assets under management in just four months. Having confirmed product demand, the firm is counting on a local brokerage acquisition to expand direct sales and wealth management services.

Japan's retail investment market has entered a phase of structural growth since the launch of the new NISA program, though ETF usage still trails South Korea. There is viewed to be ample room for growth in thematic and income-focused ETFs for individual investors, as well as in trading through mobile platforms. Mirae Asset plans to use the ETF product-development capabilities and global investment network it built in South Korea and the U.S. to offer Japanese investors broader options to invest in global assets beyond domestic stocks and traditional index funds. Park's strategy is to strengthen a global wealth management network centered on four hubs: the U.S. with Wealthspot, Australia with Stockspot, India with Sharekhan Securities, and Japan.

If the brokerage acquisition goes through, Mirae Asset will be able to combine global ETF products with a local distribution network and expand its wealth management business by attracting money directly from Japanese retail investors.

Tokyo - Choi Man-su, Korea Economic Daily correspondent bebop@hankyung.com