Korean fund managers launch ETF wave

Samsung and LG square up with foreign advisers to introduce South KoreaƆs first exchange-traded funds.

Four South Korean fund managers are expected to simultaneously launch the country's first exchange-traded funds ETFs some time in September. This will provide both retail and institutional investors with a cheap, flexible way to invest in the Kospi stock market index and provide a useful hedging tool. It may also give foreign investors a legal means to bypass ownership restrictions and help smaller foreign investors gain a credible Korean exposure.

Exchange-traded funds are a basket of shares that trade as a single security, giving investors the benefit of a mutual fund and the ease of trading a stock. Because the market makers known in Asia as authorized participants create and redeem units of ET...

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