KPOP Hasn’t Caught Up With Fans’ Increasing Interest in Korean Entertainment

Growing interest in South Korean culture and entertainment hasn’t translated into investor returns, yet.

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Reviewed by: Lisa Barr
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Edited by: Daria Solovieva

Could an exchange-traded fund created for K-pop fans see broader appeal as Korean music and entertainment enjoys a global surge in demand? 

Last week, Netflix announced it would make a $2.5 billion investment in Korean movies and shows. South Korean media stocks, including Showbox Co. and Studio Santa Claus Entertainment, surged on the news.  

Meantime, K-pop, which is leading the global expansion of Korean popular culture, continues to see its popularity rise. Girl group Blackpink made history last month by becoming the first K-pop band to headline the Coachella Music Festival.  

The Korean entertainment industry—including film, music and video games—has become a serious business, surpassing the export of home appliances and rechargeable batteries to hit a record high of $12.4 billion in 2021, according to government data cited by Reuters.  

“Squid Game” is the most-watched Netflix series of all time, and “Parasite” was the first foreign-language movie to take home the Oscar for Best Picture. 

The growing interest in Korean culture is good news for the KPOP and Korean Entertainment ETF (KPOP), which CT Investments launched in September as a way for global K-pop fans to invest in their passion.  

“There’s this fandom aspect where you want to own part of K-pop, not just consume K-pop,” Jangwon Lee, CEO of CT Investments, told etf.com.  

Despite the name, the fund includes a broad set of stocks, including Korean music conglomerates such as Hybe Corp. and JYP Entertainment, entertainment companies including CJ ENM and SM Entertainment Group, cinema operators, and internet and ad companies.   

“K-pop is an interesting theme, but it hasn’t attracted a huge amount of interest among U.S. ETF investors. While only eight months old, the KPOP ETF has just over $3 million in assets,” said etf.com’s Senior Analyst Sumit Roy. “So far, K-pop fans haven’t embraced the ETF like they have their favorite K-pop artists, and investors who are only looking at performance haven’t been interested in a fund that’s lagged the broader iShares MSCI South Korea ETF (EWY) by 600 basis points since inception. That could change, though.” 

KPOP has had a rocky start, dipping 28% to a low of $14.15 in October before recovering close to its initial price. It was trading at $20.04 on Monday.