In Spite Of The Fact That The K-Pop ETF Has Been Underperforming, Its Founder Maintains That “Korean Content Is Reaching At Inflection Point”. The inventor of a new exchange-traded fund betting on international audiences’ love for Korean media is confident in his idea.
The KPOP and Korean entertainment exchange-traded fund (ETF) has not done well since its launch on September 1. It recently traded on the New York Stock Exchange Arca at $15.05, down around 23% from its initial offering price. That’s in keeping with the general decline of the Kospi index this year, which has been more than 20%.
Despite the gloomy forecast for global markets, Jangwon Lee, CEO of CT Investments and Contents Technologies and the man responsible for the ETF, is optimistic about the Korean entertainment business.
Lee told CNBC that it has “been a terrible few weeks across all asset classes” since the creation of the fund, but that “content consumption, especially digital, is quite durable across recessionary and inflationary settings and longer term.”
In general, the stock prices of Korean entertainment companies have underperformed the market so far this year. YG Entertainment’s stock price is down almost 26% year to date, and Hypes is down more than 64%.
We expect that the fundamental success of the companies in our ETF will ultimately give additional momentum in drawing demand from a broader investor universe, he said.
As a result, we are currently living through a tipping point in which K-pop and K-content, formerly relegated to the fringes of popular culture, are rapidly being more widely consumed around the world.
The KPOP ETF is a 30-stock index that aims to give investors “focused exposure to the Korea Exchange-listed companies engaged in the entertainment industry and the interactive media & services industry.”
Some of the companies included in this index are the agencies responsible for the management of popular music acts like BTS, BlackPink, and Twice.
Content creators like Studio Dragon, who made the smash hit “Crash Landing on You,” and platform firms like AfreecaTV, where people Livestream themselves playing video games and dining, are also a part of this industry.
“We believe it is still in its early innings considering that we are experiencing an inflection point in the slow emergence of K-pop and K-content into the global mainstream from what was more of a sub-culture in the past,” he added.
Pent-up demand
Upon the reopening of borders and the relaxation of quarantine and testing regulations in countries like South Korea and Japan, CT Investments and Contents Technologies’ Lee predicted that the creative content businesses made available to global investors through this fund would flourish over the long run.
K-pop artists have been releasing new albums on purpose in anticipation of the reopening, he said, and many groups have lately begun their globe tours and concerts.
The K-pop ETF hasn’t been doing well, but its creator says Korean content is at an ‘inflection point’ https://t.co/RLP6eFZJ26
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According to Hana Financial Group’s financial expert Lee Ki-hoon, the epidemic demonstrated the genre benefited from its music industry being more “visual concept” focused, as evidenced by the success of the genre’s use of social media.
As reported in October by Lee Ki-hoon, “its global audience is seeing a trickle-down impact from groups like BTS and BlackPink,” whose success can be traced in large part to the unbound reach of YouTube. BlackPink’s channel has 82.7 million subscribers, while BTS’s BangtanTV has 71.5 million.
‘Long-term believer’
Goldman Sachs estimates that by 2030, the worldwide music industry’s revenue would have increased to $131 billion, or more than twice the $62 billion recorded in 2017. This increase is largely attributable to the rise in streaming revenue.
CT’s Jangwon Lee agrees, describing himself as a “long-term believer” in K-future. pop’s When compared to other genres, “K-pop fan involvement around the globe is considerably higher than that of other metrics,” Lee remarked.
The K-pop ETF hasn’t been doing well, but its creator says Korean content is at an ‘inflection point’ – Newsworldpress @ https://t.co/dU9ntDmrP6 pic.twitter.com/hMDKCMHE9C
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We anticipate a strong level of interest from music lovers who wish to become stockholders in businesses associated with their favorite performers, he said.
Lee of Hana Financial Group predicted that Hybe, the group behind BTS, could hit rock bottom in December when the members of the group are expected to finalize their preparations to enroll in the military of South Korea.
Lee of Connecticut stated that the agency’s assurance that the band would go ahead with its conscription preparations removed some doubt.
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