Mirae Asset shines in US ETF market
It has been five years since Mirae Asset Global Investments acquired Global X, its subsidiary managing ETFs in the U.S. Global X, which is a rising star in the U.S. market, has grown into a leader in the thematic growth ETF market, operating assets around six times bigger compared to when it was acquired by Mirae Asset.
In February 2018, Mirae Asset Global Investments acquired Global X for $488 million (520 billion won). The aim was to expand Mirae Asset's global ETF network by challenging the U.S. market, which takes up more than 70 percent of the global ETF market.
Mirae Asset Global Investments focused especially on the growth potential of Global X at the time of the acquisition. It determined that Global X, equipped with an innovative and differentiated product lineup under the catchphrase "Beyond Ordinary ETFs," had enough momentum for growth.
"We decided to invest in Global X as it is a company with a competitive edge, just like Mirae Asset 15 years ago," Mirae Asset Financial Group Chairman Park Hyun-joo said back then. He added that the deal became the cornerstone of Mirae Asset's global business plan.
Mirae Asset has shared its know-how with Global X, from product development to research and operations. The current status of Global X in the U.S. market is as high as it can be ― its assets under management (AUM) stand at 45 trillion won ― as of the end of last year, which is up six times more than what it had at the time of the acquisition. Its compound annual growth rate (CAGR) has been at 29.13 percent for the past five years, which compares favorably with the industry average of just 14.5 percent. The number of its ETS products also increased to 100 from 49, which became the foundation for the stable growth of AUM.
Now, Global X is leading the thematic growth ETF market in the U.S. It concentrated on searching for innovative themes in the ETF market, which had mostly been dominated by passive products such as ones based on market indices, and launched products comprising companies with high growth potentials. It also strengthened research ― with its own research team. Global X has been offering solutions based on products and industry information. It thereby took the initiative in the fast-changing U.S. market. It also satisfies the diverse needs of investors with a broad lineup of products other than thematic ETFs.
Global X is especially competitive in covered call ETFs. Its Nasdaq 100 Covered Call ETF achieved 8 trillion won in AUM last year, becoming one of the most popular products among Koreans investing in the U.S. market and paying back with a high dividend.
Last June, Mirae Asset Global Investments and Global X jointly acquired ETF Securities, an Australian ETF management firm. It is the first time for a local asset management firm to acquire an ETF management firm overseas with the money it earned abroad.
Mirae Asset plans to expand its global business, due to the synergy effect with Global X. It thus changed the names of ETF Securities to Global X Australia, and Mirae Asset Global Investments Brazil to Global X Brazil, as a way to enhance the brand value of Global X. It plans to diversify its business and expand to Southeast Asia and the Middle East, strengthening its foothold as a global financial group.
"The U.S. market is essential for any ETF management company to grow into a global player as it leads the ETF industry. We will concentrate our efforts to make a leap forward as a global player, maximizing synergy effects with Global X, which is expanding its presence in the U.S. market," a spokesperson for Mirae Asset Global Investments said.