ETN Market Performance In Its First 100 Trading Days
The ETN market, which opened on November 17, 2014 and marked the 100th trading day on February 24, 2015, has shown a consistent rise in trading value and outperformed the market in terms of yield.
(1) Trading In February 2015 (as of Feb.24; The same hereinafter), the average daily trading value reached KRW 840 million, which is 8 times the amount recorded 100 days earlier.
While the trading between LPs (liquidity providers) and individuals take the most part, the proportion of trading by LPs decreased from 49.7% in November 2014 to 42.7% in February 2015. This indicates that general investors are becoming more active in their participation in the market.
(2) Yield
The average yield of the entire issues during 100 days (Nov.17, 2014- Feb.24, 2015) posted 2.7%, reaching far higher than 1.2% of the market (i.e. KOSPI 200) recorded in the same period.
The yield for 7 out of 10 issues increased on an average of 5.0%. Particularly, the yield of Perfex Europe High Dividend ETNs rose 5.1% in February alone, and, as a result, it ranked No.1 with the highest cumulative yield of 15.9% delivered for 100 days.
2. Plan and Outlook
The demand for direct investment in overseas markets is expected to grow against the backdrop that the trend of low interest rates and slow economic growth has persisted in the domestic market. The KRX will focus on absorbing the overseas investment demand through the ETN market.
The initial listings of 7 issuers, including Mirae Asset Securities which is to enter the ETN market in early March, will start in full swing in April. Given that each issuing company has around 10 new products in pipeline, the proportion of ETNs against ETFs of Korea is expected to be far higher than that of the US and Japan. In addition, the trading value is predicted to increase at least 0.5% (average daily trading value of approximately KRW 3.4 billion) at the end of this year when compared to the ETFs due to the expansion of ETN product lineup and aggressive marketing activities.
Source: KRX Korea Exchange
