[Newsmaker] [Herald Interview] ‘Even in bearish market, Ok-pop-themed ETF will shine’ – The Korea Herald

Contents Applied sciences CEO Lee Jang-won (Contents Applied sciences)

Not like shares, it’s uncommon for an funding like an exchange-traded fund (ETF) to attract world consideration. However KPOP ETF went viral in April when plans for the fund hit the information, reflecting the recognition of one in every of South Korea’s most high-profile exports.

The orchestrator behind the ETF — set to debut within the US market on July 5 – is Seoul-based mental property mogul, and Contents Applied sciences CEO, Lee Jang-won who not too long ago sat down with The Korea Herald to debate whether or not the Kospi’s bearish flip would maintain again his brainchild.

“KPOP ETF is particular as a result of it combines two engaging entities: ETFs and Ok-pop-related shares,” mentioned Lee.

“ETF shines out in a bearish market as a substitute for shares as a result of it helps retail buyers navigate the market after they lack confidence of their selections. It offers synergy with Ok-pop-related shares as a result of they’ve had higher performances in comparison with different sectors of the market,” he added.

A key issue that drives Ok-pop’s world reputation is its concert events and performances, and with social distancing and journey restrictions easing, the trade has a rosy future, Lee mentioned.

KPOP ETF is designed by Contents Applied sciences’ subsidiary, CT Investments, to trace securities of 30 completely different Ok-pop-related firms, most of that are listed on the Kospi, Korea’s principal bourse.

The listing contains Hybe, the corporate behind Ok-pop sensation BTS, leisure big CJ ENM, and different main powerhouses similar to YG, SM and JYP. An official near the matter instructed The Korea Herald final month that Hybe would account for 10 p.c of the portfolio resulting from its giant market capitalization.

As a passive ETF, the fund will likely be managed on a weighted common, that means all shares within the portfolio will every have a ten p.c cap relying on the dimensions of their respective market capitalization. Lee hopes that, beneath administration, the product’s belongings will attain not less than 1 trillion received ($776 billion) and finally will hit 2 trillion received.

On whether or not he has any plans to department out to different content-related ETFs, Lee mentioned it could rely upon the success of this one.

“I’d like to supply extra thematic ETFs primarily based on Korean content material, however for now, our principal focus is to advertise and convey in regards to the success of KPOP ETF.”

President Joe Biden data a web based handle with BTS within the Oval Workplace of the White Home in Washington on Could 31. (Massive Hit Leisure)

Lee’s resolution to mix the weather of Ok-pop and ETF emanates expertise of launching Mapiacompany, a music rating IP funding agency, in 2016 adopted by co-leading Past Music, an area music IP funding and tune administration firm additionally based final 12 months by the 29-year-old innovator.

Past Music’s enterprise mannequin is much like the UK music IP funding agency Hipgnosis Songs Fund, which believes that hit songs are predictable belongings so long as the worldwide music streaming market grows.

“Via the yearslong expertise I realized the right way to monetize music-related IP and the way it’s distributed and offered beneath the present authorized system,” he defined.

“Music is such a world content material unaffected by language limitations and it’s essential to legally defend its creators and artists from IP infringements.”

Regardless of the rising reputation with younger buyers of IP-related fractional funding platforms, similar to Musicow, Contents Applied sciences has no plans to enter the fractional funding market.

“It’s an attention-grabbing market, however fractional investments generally lack the liquidity to assist buyers exit safely in contrast with extra conventional investments. These days, it’s common for buyers to make use of borrowed capital or leverage when buying an asset similar to actual property, however this can be very tough to make use of borrowed capital for fractional funding. This method places collectors earlier than buyers, growing the chance for buyers after they both need to withdraw or search returns in a bearish market.“

Contents Applied sciences, launched final 12 months, secured over 20 billion received by way of two profitable rounds of funding inside 11 months of its institution. It features a 17 billion-won Sequence A funding spherical carried out in January. The agency, headquartered within the Gangnam space of Seoul, has six subsidiaries that it owns over 51 p.c stake in, with some 40 workers.

(mkjung@heraldcorp.com)

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