Key Takeaways
- • DS Asset Management launched its first exchange-traded fund, "DS KOSDAQ Active," on July 14, 2026, listing on the Korea Exchange with a 1.00% annual fee—the highest among domestic ETFs.
- • The firm selected KOSDAQ as its debut ETF product because the market exhibits low correlation among constituent stocks (0.13 over three years), creating opportunities for active stock selection and alpha generation.
- • KOSDAQ 150 represents only 60% of the market capitalization in the segment, leaving 40% uncovered by representative indices—a gap DS Asset Management identifies as a source of excess returns through active management.
- • The KOSPI 200 index concentrates 93% of market capitalization, whereas KOSDAQ's fragmented structure allows skilled security selection to outperform passive benchmarks, positioning DS Asset Management to monetize its equity research capabilities.
Summary
DS Asset Management announced the launch of its inaugural exchange-traded fund on July 10, 2026, at a press conference held at the Korea Exchange in Yeouido, Seoul. The product, "DS KOSDAQ Active," commenced trading on July 14, 2026, marking the firm's first foray into the ETF market. The fund carries an annual management fee of 1.00%, the highest among currently available domestic ETFs, reflecting the active management approach embedded in the product.
The asset manager's strategic decision to focus on KOSDAQ reflects a deliberate thesis regarding market structure and alpha opportunities. Jung Sung-in, director of DS Asset Management's ETF team, highlighted that KOSDAQ stocks exhibit a correlation coefficient of only 0.13 over the three-year period, indicating substantial idiosyncratic risk and limited co-movement. This low correlation profile creates an environment where active stock selection can generate meaningful excess returns, contrasting with more correlated large-cap indices where passive strategies typically dominate.
The firm identified a significant structural gap in KOSDAQ index composition. While the KOSPI 200 encompasses approximately 93% of total market capitalization in the Korean equity market, the KOSDAQ 150 index captures only about 60% of market capitalization within the KOSDAQ segment. This 40% gap represents an underrepresented universe of mid-market and growth-oriented companies, according to DS Asset Management's analysis. The firm positions this uncovered territory as a prime opportunity for active security selection to generate alpha relative to passive benchmarks that rely on the representative KOSDAQ 150 index.
DS Asset Management's market entry reflects broader trends in domestic asset management, where pockets of market inefficiency—particularly in less-liquid, lower-correlation segments—continue to support active management strategies. The premium fee structure of the DS KOSDAQ Active ETF signals investor recognition that active management in this segment commands a pricing premium, reflecting confidence in the firm's stock selection capabilities and the underlying opportunity set.
The asset manager's strategic decision to focus on KOSDAQ reflects a deliberate thesis regarding market structure and alpha opportunities. Jung Sung-in, director of DS Asset Management's ETF team, highlighted that KOSDAQ stocks exhibit a correlation coefficient of only 0.13 over the three-year period, indicating substantial idiosyncratic risk and limited co-movement. This low correlation profile creates an environment where active stock selection can generate meaningful excess returns, contrasting with more correlated large-cap indices where passive strategies typically dominate.
The firm identified a significant structural gap in KOSDAQ index composition. While the KOSPI 200 encompasses approximately 93% of total market capitalization in the Korean equity market, the KOSDAQ 150 index captures only about 60% of market capitalization within the KOSDAQ segment. This 40% gap represents an underrepresented universe of mid-market and growth-oriented companies, according to DS Asset Management's analysis. The firm positions this uncovered territory as a prime opportunity for active security selection to generate alpha relative to passive benchmarks that rely on the representative KOSDAQ 150 index.
DS Asset Management's market entry reflects broader trends in domestic asset management, where pockets of market inefficiency—particularly in less-liquid, lower-correlation segments—continue to support active management strategies. The premium fee structure of the DS KOSDAQ Active ETF signals investor recognition that active management in this segment commands a pricing premium, reflecting confidence in the firm's stock selection capabilities and the underlying opportunity set.
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