The K-pop ETF hasn't been doing well, but its creator says Korean content is at 'inflection point'

The creator down the new exchange-traded fund aimed astatine converting planetary fans of Korean contented into an concern accidental is optimistic successful his premise. 

Since its motorboat connected Sept. 1, the KPOP and Korean amusement ETF has not performed good — precocious trading connected the New York Stock Exchange Arca astatine $15.05 — a astir 23% driblet from its debut. That's successful enactment with the wide Kospi scale having plummeted much than 20% this year.

But Jangwon Lee, main enforcement of CT Investments and Contents Technologies and the creator of the ETF, is hopeful astir the Korean amusement manufacture contempt the sluggish outlook for planetary markets.

"Content consumption, particularly digital, is comparatively resilient crossed recessionary and inflationary environments and longer term," said Lee successful an interrogation with CNBC, adding that it's "been a pugnacious fewer weeks crossed each plus classes" since the fund's inception. 

Shares of Korean amusement companies person been underperforming overall, with YG Entertainment's banal terms down astir 26% year-to-date and Hybe down much than 64% year-to-date.

"We yet judge that the underlying show of the companies successful our ETF volition supply further momentum successful attracting request from a wider capitalist universe," helium said. 

The KPOP ETF says connected its website that it provides "focused vulnerability to the Korea Exchange-listed companies engaged successful the amusement manufacture and the interactive media & services industry." The money is simply a 30-stock index, which includes amusement companies that negociate bands specified arsenic BTS, BlackPink, and Twice — their respective agencies being HYBE, YG Entertainment, and SM Entertainment.

It besides includes contented makers specified arsenic Studio Dragon, which produced the deed bid "Crash Landing connected You" and level companies specified arsenic AfreecaTV, done which immoderate livestream themselves playing video games and eating.

"We judge it is inactive successful its aboriginal innings fixed that we are witnessing an inflection constituent successful K-pop and K-content gradually attaining mainstream presumption globally from what was much a sub-culture successful the past," helium said.

Lee of CT Investments and Contents Technologies said the originative contented businesses that this money makes accessible to planetary investors volition thrive successful the longer term, with borders reopening and countries specified arsenic South Korea and Japan lifting quarantine and investigating rules for tourists.

"There is important pent-up request among existing fans and K-pop artists person been deliberately releasing caller albums successful clip for the reopening," helium said, adding that galore creator groups person precocious resumed their satellite tours and concerts.

Financial expert Lee Ki-hoon astatine Hana Financial Group said the pandemic proved the genre benefitted from its euphony concern being much "visual concept" oriented, arsenic seen done its societal media outreach.

"Its planetary fandom is seeing a trickle-down effect from groups similar BTS and BlackPink, arsenic they were nonstop beneficiaries of YouTube – it isn't constricted by clip oregon location," Lee Ki-hoon said successful an October report.

BangtanTV, 1 of BTS' YouTube channels, has 71.5 cardinal subscribers, portion BlackPink's channel has 82.7 cardinal subscribers.

Goldman Sachs predicts revenue from the planetary euphony industry volition scope $131 cardinal by 2030 – much than treble the $62 cardinal for 2017 — adding that streaming volition boost the manufacture to grounds highs.

CT's Jangwon Lee is likewise optimistic, adding helium is simply a "long-term believer" successful K-pop's outlook wrong the wider industry.

"K-pop instrumentality engagement crossed the globe is materially higher than that of different genres crossed metrics, specified arsenic societal media engagement and merchandise income including carnal medium sales," Lee said.

"We judge determination could beryllium a precocious conversion among fans becoming shareholders successful companies that their favourite artists are affiliated with," helium said.

In the nearer term, Lee of Hana Financial Group said that Hybe, the radical down BTS, whitethorn bottommost retired sometime astir December, erstwhile the group's plans for enlisting successful South Korea's subject are finalized.

Lee of CT said the agency's confirmation that the set volition determination guardant with its conscription plans means eliminates immoderate uncertainty.

"A important overhang has been removed," Lee said, adding that the absorption of investors volition present "shift toward different maturation prospects crossed its business."