South Korea’s boy band BTS is one of the hottest musical acts in the world and the face of the K-pop craze that is sweeping the globe. The KPOP and Korean Entertainment ETF (KPOP) that launched Thursday gives investors a way to play that phenomenon.
KPOP comes with an expense ratio of 0.75% and lists on the NYSE Arca.
The fund tracks an index that targets entertainment companies listed on the Korea Exchange above a minimum size requirement and uses natural language processing to hone its focus on the most relevant companies involved in all aspects of South Korea’s entertainment and interactive media industries. Companies are selected from there based on their market capitalization and relevance scores, according to the fund prospectus.
Companies are weighted by market capitalization in the index subject to a cap of 9.85% on individual companies, with 70%-80% of the index representing the entertainment industry, and 20%-30% of the index representing interactive media, the document says.
Investors considering the fund should understand they are investing in a small part of a small stock market. South Korea has a weighting of less than 2% in the Vanguard Total World Stock ETF (VT).
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