K-pop ETF creator says Korean content is at an ‘inflection point’

The creator behind the new trade-traded fund aimed at changing global enthusiasts of Korean written content into an investment possibility is optimistic in his premise. 

Considering that its start on Sept. 1, the KPOP and Korean enjoyment ETF has not done effectively — a short while ago buying and selling on the New York Inventory Exchange Arca at $15.05 — a around 23% fall from its debut. Which is in line with the over-all Kospi index getting plummeted extra than 20% this 12 months.

But Jangwon Lee, main government of CT Investments and Contents Systems and the creator of the ETF, is hopeful about the Korean entertainment market in spite of the sluggish outlook for global marketplaces.

“Content usage, in particular digital, is somewhat resilient across recessionary and inflationary environments and for a longer period time period,” mentioned Lee in an interview with CNBC, introducing that it is really “been a tough several weeks across all asset lessons” because the fund’s inception. 

Shares of Korean leisure firms have been underperforming all round, with YG Entertainment’s inventory price tag down about 26% yr-to-day and Hybe down more than 64% calendar year-to-day.

“We in the long run think that the underlying efficiency of the organizations in our ETF will provide more momentum in attracting demand from customers from a wider investor universe,” he said. 

The KPOP ETF suggests on its web site that it provides “targeted publicity to the Korea Exchange-outlined corporations engaged in the leisure industry and the interactive media & companies sector.” The fund is a 30-inventory index, which contains enjoyment organizations that control bands these kinds of as BTS, BlackPink, and Twice — their respective businesses becoming HYBE, YG Enjoyment, and SM Enjoyment.

It also involves content makers this sort of as Studio Dragon, which manufactured the hit series “Crash Landing on You” and system businesses these kinds of as AfreecaTV, by which some livestream them selves playing video clip game titles and eating.

“We feel it is continue to in its early innings supplied that we are witnessing an inflection stage in K-pop and K-written content gradually attaining mainstream status globally from what was a lot more a sub-society in the past,” he stated.

Lee of CT Investments and Contents Systems stated the imaginative written content corporations that this fund would make accessible to international investors will prosper in the more time phrase, with borders reopening and international locations this kind of as South Korea and Japan lifting quarantine and screening guidelines for visitors.

“There is significant pent-up need among the existing lovers and K-pop artists have been deliberately releasing new albums in time for the reopening,” he explained, introducing that many artist teams have lately resumed their globe excursions and concerts.

Money analyst Lee Ki-hoon at Hana Economical Group mentioned the pandemic proved the style benefitted from its new music organization currently being a lot more “visual principle” oriented, as noticed through its social media outreach.

“Its world fandom is seeing a trickle-down outcome from teams like BTS and BlackPink, as they were being direct beneficiaries of YouTube – it is just not confined by time or site,” Lee Ki-hoon reported in an Oct report.

BangtanTV, just one of BTS’ YouTube channels, has 71.5 million subscribers, though BlackPink’s channel has 82.7 million subscribers.

Goldman Sachs predicts income from the world-wide songs marketplace will reach $131 billion by 2030 – much more than double the $62 billion for 2017 — incorporating that streaming will increase the business to record highs.

CT’s Jangwon Lee is in the same way optimistic, adding he is a “prolonged-time period believer” in K-pop’s outlook within the wider field.

“K-pop lover engagement across the world is materially larger than that of other genres throughout metrics, these as social media engagement and items product sales together with actual physical album sales,” Lee mentioned.

“We believe that there could be a superior conversion amid followers starting to be shareholders in businesses that their beloved artists are affiliated with,” he stated.

In the nearer time period, Lee of Hana Fiscal Team mentioned that Hybe, the group guiding BTS, might base out someday all over December, when the group’s plans for enlisting in South Korea’s navy are finalized.

Lee of CT reported the agency’s affirmation that the band will shift forward with its conscription options suggests eradicates some uncertainty.

“A sizeable overhang has been taken out,” Lee stated, adding that the aim of buyers will now “change towards other growth prospective buyers across its company.”