K-pop lady group BlackPink carried out at The Late Late Show with James Corden airing Thursday, April 18, 2019. (Photo by Terence Patrick/CBS through Getty Images)
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The creator behind the brand new exchange-traded fund aimed at changing world followers of Korean content into an funding alternative is optimistic in his premise.
Since its launch on Sept. 1, the KPOP and Korean leisure ETF has not carried out nicely — just lately buying and selling on the New York Stock Exchange Arca at $15.05 — a roughly 23% drop from its debut. That’s according to the general Kospi index having plummeted greater than 20% this year.
But Jangwon Lee, chief government of CT Investments and Contents Technologies and the creator of the ETF, is hopeful concerning the Korean leisure trade regardless of the sluggish outlook for world markets.
“Content consumption, especially digital, is relatively resilient across recessionary and inflationary environments and longer term,” mentioned Lee in an interview with CNBC, including that it is “been a tough few weeks across all asset classes” because the fund’s inception.
Shares of Korean leisure corporations have been underperforming general, with YG Entertainment’s stock value down round 26% year-to-date and Hybe down greater than 64% year-to-date.
“We ultimately believe that the underlying performance of the companies in our ETF will provide further momentum in attracting demand from a wider investor universe,” he mentioned.
The KPOP ETF says on its website that it offers “focused exposure to the Korea Exchange-listed companies engaged in the entertainment industry and the interactive media & services industry.” The fund is a 30-stock index, which incorporates leisure corporations that handle bands similar to BTS, BlackPink, and Twice — their respective companies being HYBE, YG Entertainment, and SM Entertainment.
It additionally consists of content makers similar to Studio Dragon, which produced the hit sequence “Crash Landing on You” and platform corporations similar to AfreecaTV, by way of which some livestream themselves taking part in video video games and consuming.
“We believe it is still in its early innings given that we are witnessing an inflection point in K-pop and K-content gradually attaining mainstream status globally from what was more a sub-culture in the past,” he mentioned.
K-pop lady group Twice of JYP Entertainment at Yes24 Live Hall on April 22, 2019, in Seoul, South Korea. Shares of Korean leisure corporations have been underperforming general.
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Lee of CT Investments and Contents Technologies mentioned the artistic content companies that this fund makes accessible to world traders will thrive in the long run, with borders reopening and international locations similar to South Korea and Japan lifting quarantine and testing rules for tourists.
“There is significant pent-up demand among existing fans and K-pop artists have been deliberately releasing new albums in time for the reopening,” he said, adding that many artist groups have recently resumed their world tours and concerts.
Financial analyst Lee Ki-hoon at Hana Financial Group said the pandemic proved the genre benefitted from its music business being more “visual concept” oriented, as seen through its social media outreach.
“Its global fandom is seeing a trickle-down effect from groups like BTS and BlackPink, as they were direct beneficiaries of YouTube – it isn’t limited by time or location,” Lee Ki-hoon said in an October report.
BTS performs onstage through the sixty fourth Annual GRAMMY Awards at MGM Grand Garden Arena on April 3, 2022 in Las Vegas, Nevada.
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Goldman Sachs predicts revenue from the global music industry will attain $131 billion by 2030 – greater than double the $62 billion for 2017 — including that streaming will enhance the trade to document highs.
CT’s Jangwon Lee is equally optimistic, including he is a “long-term believer” in K-pop’s outlook throughout the wider trade.
“K-pop fan engagement across the globe is materially higher than that of other genres across metrics, such as social media engagement and merchandise sales including physical album sales,” Lee mentioned.
“We believe there could be a high conversion among fans becoming shareholders in companies that their favorite artists are affiliated with,” he mentioned.
In the nearer time period, Lee of Hana Financial Group mentioned that Hybe, the group behind BTS, might backside out someday round December, when the group’s plans for enlisting in South Korea’s army are finalized.
Lee of CT mentioned the company’s affirmation that the band will transfer ahead with its conscription plans means eliminates some uncertainty.
“A significant overhang has been removed,” Lee mentioned, including that the main target of traders will now “shift toward other growth prospects across its business.”