With new headlines dropping daily about the global expansion of K-pop, overseas investors now have a chance to cash in.
Today, Sept. 1, a K-pop and Korean-entertainment ETF — under the ticker name KPOP — launched on the NYSE Arca Exchange through South Korean IP investment company Contents Technologies. With top pop-culture players on board, KPOP marks the first time investors in the U.S. and Europe can access the companies most directly involved in the expanding K-pop music scene.
Of the 30 corporations in the exchange-traded fund, the major holding companies of KPOP include several of the scene’s most internationally influential names, all publicly listed on the local Korea Composite Stock Price Index.
KPOP ETF includes music agencies like HYBE (the home to BTS, Tomorrow X Together, Seventeen, and the artists across its seven labels), YG Entertainment (the agency of Blackpink and Bigbang), JYP Entertainment (the label home to Twice, Stray Kids and Itzy), and SM Entertainment (the entertainment agency behind NCT and Aespa).
The ETF also includes Korean-entertainment giant CJ ENM (that operates in TV, commerce, and recently produced and distributed “Parasite”), Studio Dragon (a CJ ENM subsidiary that produces and distributes Korean drama programming), Naver (Korea’s top search engine that also produces K-pop content), and Kakao Corp (the country’s largest mobile messenger that also oversees labels through its entertainment subsidiary).
Billboard notes that companies eligible for KPOP needed a market capitalization exceeding 100 billion KRW (about $73.7 million).
“K-pop, which has become a global keyword, has become part of mainstream culture for fans in Korea as well as around the world,” Jangwon Lee, CEO of CT Investments and Contents Technologies, said in a statement. “We are launching this ETF to provide an opportunity for global fans who love K-pop to participate in the potential growth and development of the K-pop industry as well as investors access to Korea-listed companies that are driving the future of global content industry forward.”
In the IFPI’s annual “State of the Industry” report, South Korea spent its ninth year as one of the 10 largest music markets. Helping fuel growth increased music subscriptions and that “Korea has an amazing level of fan development and fan engagement that no territory in the West has come close to replicating.”
The ETF also is interesting for its inclusion in the wider-scope entertainment companies whose primary focus isn’t music but still are heavily influential in the industry with their content opportunities and host a continuous stream of K-pop content. CJ ENM and Kakao are increasingly revving up their music assets, including developing and launching their own K-pop idol groups.
Lee added, “The global market for K-pop is still at an early stage of growth, and the KPOP and Korean Entertainment ETF will offer thematic exposure to key companies in the Korean entertainment and media industry that benefit from this secular trend.”