Bloomberg and Korea Investment Management Launch first Vietnam VN30 Futures Leverage ETF
Bloomberg has announced that Korea Investment Management Co. (KIM), one of South Korea’s largest asset managers, has adopted the Bloomberg VN30 Futures Index as the underlying index for its newly launched ‘KINDEX Vietnam VN30 Futures Leverage (H) ETF’ in South Korea, marking the first launch of a Bloomberg Index product in South Korea.
The ‘KINDEX Vietnam VN30 Futures Leverage (H) ETF’ will use VN30 Futures, Vietnam’s first tradable stock index futures launched in 2017, to track its returns, Bloomberg explained in a press release. The debut will offer Korean investors a chance to capitalize on Vietnam’s accelerating growth, which consistently outpaces many of its ASEAN peers.
The product also provides Korean investors broad access to Vietnam’s derivatives market without foreign investor limitations. At the same time, its currency hedged structure will mitigate investors’ exposure to currency fluctuations.
According to the Hanoi Stock Exchange (HNX), the average trading volume on their derivatives market reached 88,740 contracts per session in 2019, a year-on-year increase of 12.6%. The growth continued in the first seven months of 2020, with the average trading volume increasing by nearly 95% compared to 2019, reaching 173,000 contracts per session. The strong growth of Vietnam’s derivatives market has also attracted foreign capital inflows, particularly for products simulating the VN30 Index.
Seongin Jeong, Head of ETFs, Korea Investment Management Co., said: “We continue to see tremendous potential in the growing economy of Vietnam, driven largely by the country’s robust economic reforms, its role in the ASEAN’s supply chains and attractiveness for foreign direct investment, and the advanced development of its financial system. The launch of ‘KINDEX Vietnam VN30 Futures Leverage (H) ETF’ with the Bloomberg VN30 Futures Index as its benchmark is the start of our long-term partnership with one of the world’s top indices provider. Bloomberg’s world class data, analytics and index tools will help deepen our domestic ETF market and service increasingly sophisticated Korean investors.”
Ji Zhuang, Head of Indices, Bloomberg, said: “We are excited to support the launch of this unique and exciting product for Korean investors. Bloomberg has a strong track-record supporting some of the region’s largest fixed income ETF products and we look forward to further tailoring and expanding our multi asset class index offerings for this fast-growing region.”
Korea Investment Management Co. was South Korea’s first asset management firm to establish a presence in Vietnam in 2006. KIM recently established an office in Vietnam and now manages Vietnam-invested funds of KRW1.5 trillion in assets. KIM also saw the launch of South Korea’s first ETF tracking the Vietnam VN30 Index in 2016, with an ETF net asset value worth KRW 200 billion as of September, 2020.
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